Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
x       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2015
 
OR
 
o          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from           to           
 
Commission file number 001-33393

 
GENCO SHIPPING & TRADING LIMITED
(Exact name of registrant as specified in its charter)

Republic of the Marshall Islands	 	98-043-9758	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
 
299 Park Avenue, 12 th  Floor, New York, New York 10171
(Address of principal executive offices) (Zip Code)
 
(646) 443-8550
(Registrant’s telephone number, including area code)

 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x  No  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	 	Accelerated filer  o	
 	 	 	
Non-accelerated filer  x	 	Smaller reporting company  o	
(Do not check if a smaller reporting company)	 	 	
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o  No  x
 
The number of shares outstanding of each of the issuer’s classes of common stock, as of May 8, 2015: Common stock, $0.01 per share — 61,600,604 shares.

 

Table of Contents
 
Genco Shipping &  Trading Limited

 	 	 	Page	
 	 	 	 	
PART I — FINANCIAL INFORMATION	
 	 	 	 	
Item 1.	Financial Statements (unaudited)	 	
 	 	 	 	
 	a)	Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014	1	
 	 	 	 	
 	b)	Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2015 and 2014	2	
 	 	 	 	
 	c)	Condensed Consolidated Statements of Comprehensive Loss for the Three Months ended March 31, 2015 and 2014	3	
 	 	 	 	
 	d)	Condensed Consolidated Statements of Equity for the Three Months ended March 31, 2015 and 2014	4	
 	 	 	 	
 	e)	Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2015 and 2014	5	
 	 	 	 	
 	f)	Notes to Condensed Consolidated Financial Statements	6	
 	 	 	 	
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31	
 	 	 	 	
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55	
 	 	 	 	
Item 4.	Controls and Procedures	56	
 	 	 	 	
PART II —OTHER INFORMATION	
 	 	 	 	
Item 1.	Legal Proceedings	57	
 	 	 	 	
Item 1A.	Risk Factors	57	
 	 	 	 	
Item 6.	Exhibits	58	
 
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Website Information
 
We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor section. Accordingly, investors should monitor the Investor portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please submit your e-mail address at the Investor Relations Home page of the Investor section of our website. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.
 
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PART I. FINANCIAL INFORMATION 
 
ITEM 1. FINANCIAL STATEMENTS 
 
Genco Shipping & Trading Limited
Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014 
(U.S. Dollars in thousands, except for share and per share data)
(Unaudited)

 	 	Successor	 	Successor	 	
 	 	March 31,
2015	 	December 31,
2014	 	
Assets	 	 	 	 	 	
Current assets:	 	 	 	 	 	
Cash and cash equivalents	 	$	68,783	 	$	83,414	 	
Restricted cash	 	9,750	 	9,750	 	
Due from charterers, net of a reserve of $1,371 and $1,588, respectively	 	12,366	 	14,739	 	
Prepaid expenses and other current assets	 	25,920	 	22,423	 	
Total current assets	 	116,819	 	130,326	 	
 	 	 	 	 	 	
Noncurrent assets:	 	 	 	 	 	
Vessels, net of accumulated depreciation of $52,271 and $36,258, respectively	 	1,508,885	 	1,532,843	 	
Deposits on vessels	 	19,237	 	25,593	 	
Deferred drydock, net of accumulated amortization of $722 and $330, respectively	 	9,375	 	6,234	 	
Deferred financing costs, net of accumulated amortization of $1,216 and $729, respectively	 	10,061	 	10,271	 	
Fixed assets, net of accumulated depreciation and amortization of $170 and $119, respectively	 	783	 	701	 	
Other noncurrent assets	 	514	 	514	 	
Restricted cash	 	300	 	19,945	 	
Investments	 	28,845	 	26,486	 	
Total noncurrent assets	 	1,578,000	 	1,622,587	 	
 	 	 	 	 	 	
Total assets	 	$	1,694,819	 	$	1,752,913	 	
 	 	 	 	 	 	
Liabilities and Equity	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	
Accounts payable and accrued expenses	 	$	29,817	 	$	28,217	 	
Current portion of long-term debt	 	44,576	 	34,324	 	
Deferred revenue	 	1,837	 	1,397	 	
Total current liabilities	 	76,230	 	63,938	 	
 	 	 	 	 	 	
Noncurrent liabilities:	 	 	 	 	 	
Long-term lease obligations	 	593	 	390	 	
Long-term debt	 	390,032	 	395,811	 	
Total noncurrent liabilities	 	390,625	 	396,201	 	
 	 	 	 	 	 	
Total liabilities	 	466,855	 	460,139	 	
 	 	 	 	 	 	
Commitments and contingencies	 	 	 	 	 	
 	 	 	 	 	 	
Equity:	 	 	 	 	 	
Genco Shipping & Trading Limited shareholders’ equity:	 	 	 	 	 	
Successor Company common stock, par value $0.01; 250,000,000 shares authorized; issued and outstanding  61,541,389 shares at March 31, 2015 and December 31, 2014	 	615	 	615	 	
Successor Company additional paid-in capital	 	1,262,327	 	1,251,197	 	
Accumulated other comprehensive loss	 	(22,958	)	(25,317	)	
Retained deficit	 	(220,736	)	(182,294	)	
Total Genco Shipping & Trading Limited shareholders’ equity	 	1,019,248	 	1,044,201	 	
Noncontrolling interest	 	208,716	 	248,573	 	
Total equity	 	1,227,964	 	1,292,774	 	
 	 	 	 	 	 	
Total liabilities and equity	 	$	1,694,819	 	$	1,752,913	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2015 and 2014 
(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)
(Unaudited)

 	 	Successor	 	Predecessor	 	
 	 	For the Three
Months Ended
March 31,
2015	 	For the Three
Months Ended
March 31,
2014	 	
Revenues:	 	 	 	 	 	
Voyage revenues	 	$	33,609	 	$	63,180	 	
Service revenues	 	810	 	810	 	
 	 	 	 	 	 	
Total revenues	 	34,419	 	63,990	 	
 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	
Voyage expenses	 	4,380	 	1,956	 	
Vessel operating expenses	 	28,672	 	31,223	 	
General, administrative and management fees	 	20,324	 	15,376	 	
Depreciation and amortization	 	19,410	 	36,201	 	
Impairment of vessel assets	 	35,396	 	—	 	
 	 	 	 	 	 	
Total operating expenses	 	108,182	 	84,756	 	
 	 	 	 	 	 	
Operating loss	 	(73,763	)	(20,766	)	
 	 	 	 	 	 	
Other (expense) income:	 	 	 	 	 	
Other income (expense)	 	11	 	(57	)	
Interest income	 	24	 	20	 	
Interest expense	 	(4,324	)	(21,023	)	
 	 	 	 	 	 	
Other expense	 	(4,289	)	(21,060	)	
 	 	 	 	 	 	
Loss before reorganization items, net	 	(78,052	)	(41,826	)	
Reorganization items, net	 	(520	)	—	 	
 	 	 	 	 	 	
Loss before income taxes	 	(78,572	)	(41,826	)	
Income tax expense	 	(543	)	(412	)	
 	 	 	 	 	 	
Net loss	 	(79,115	)	(42,238	)	
Less: Net loss attributable to noncontrolling interest	 	(40,673	)	(3,133	)	
Net loss attributable to Genco Shipping & Trading Limited	 	$	(38,442	)	$	(39,105	)	
 	 	 	 	 	 	
Net loss per share-basic	 	$	(0.64	)	$	(0.90	)	
Net loss per share-diluted	 	$	(0.64	)	$	(0.90	)	
Weighted average common shares outstanding-basic	 	60,430,789	 	43,568,942	 	
Weighted average common shares outstanding-diluted	 	60,430,789	 	43,568,942	 	
Dividends declared per share	 	$	—	 	$	—	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Comprehensive Loss 
For the Three Months Ended March 31, 2015 and 2014
(U.S. Dollars in Thousands)
(Unaudited)

 	 	Successor	 	Predecessor	 	
 	 	For the Three
Months Ended
March 31,
2015	 	For the Three
Months Ended
March 31,
2014	 	
 	 	 	 	 	 	
Net loss	 	$	(79,115	)	$	(42,238	)	
 	 	 	 	 	 	
Change in unrealized gain (loss) on investments	 	2,359	 	(14,215	)	
Unrealized gain on cash flow hedges, net	 	—	 	1,228	 	
Other comprehensive income (loss)	 	2,359	 	(12,987	)	
 	 	 	 	 	 	
Comprehensive loss	 	(76,756	)	(55,225	)	
Less: Comprehensive loss attributable to noncontrolling interest	 	(40,673	)	(3,133	)	
Comprehensive loss attributable to Genco Shipping & Trading Limited	 	$	(36,083	)	$	(52,092	)	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Equity 
For the Three Months Ended March 31, 2015 and 2014
(U.S. Dollars in Thousands)
(Unaudited)

 	 	Common
Stock	 	Additional
Paid-in
Capital	 	Accumulated
Other
Comprehensive
(Loss)
Income	 	Retained
(Deficit)
Earnings	 	Genco
Shipping &
Trading
Limited
Shareholders’
Equity	 	Noncontrolling
Interest	 	Total Equity	 	
Balance — January 1, 2015 (Successor)	 	$	615	 	$	1,251,197	 	$	(25,317	)	$	(182,294	)	$	1,044,201	 	$	248,573	 	$	1,292,774	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	 	 	 	 	 	(38,442	)	(38,442	)	(40,673	)	(79,115	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized gain on investments	 	 	 	 	 	2,359	 	 	 	2,359	 	—	 	2,359	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Settlement of non-accredited Note holders	 	 	 	(414	)	 	 	 	 	(414	)	—	 	(414	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock amortization	 	 	 	11,544	 	 	 	 	 	11,544	 	816	 	12,360	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance — March 31, 2015 (Successor)	 	$	615	 	$	1,262,327	 	$	(22,958	)	$	(220,736	)	$	1,019,248	 	$	208,716	 	$	1,227,964	 	

 	 	Common
Stock	 	Additional
Paid-in
Capital	 	Accumulated
Other
Comprehensive
(Loss)
Income	 	Retained
(Deficit)
Earnings	 	Genco
Shipping &
Trading
Limited
Shareholders’
Equity	 	Noncontrolling
Interest	 	Total Equity	 	
Balance — January 1, 2014 (Predecessor)	 	$	445	 	$	846,658	 	$	53,722	 	$	66,644	 	$	967,469	 	$	341,336	 	$	1,308,805	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	 	 	 	 	 	(39,105	)	(39,105	)	(3,133	)	(42,238	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in unrealized gain on investments	 	 	 	 	 	(14,215	)	 	 	(14,215	)	—	 	(14,215	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized gain on cash flow hedges, net	 	 	 	 	 	1,228	 	 	 	1,228	 	—	 	1,228	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock amortization	 	 	 	427	 	 	 	 	 	427	 	963	 	1,390	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash dividends paid by Baltic Trading Limited	 	 	 	 	 	 	 	(4	)	(4	)	(1,530	)	(1,534	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Vesting of restricted shares issued by Baltic Trading Limited	 	 	 	96	 	 	 	 	 	96	 	(96	)	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance — March 31, 2014 (Predecessor)	 	$	445	 	$	847,181	 	$	40,735	 	$	27,535	 	$	915,896	 	$	337,540	 	$	1,253,436	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014 
(U.S. Dollars in Thousands)
(Unaudited)

 	 	Successor	 	Predecessor	 	
 	 	For the Three
Months Ended
March 31,
2015	 	For the Three
Months Ended
March 31,
2014	 	
Cash flows from operating activities:	 	 	 	 	 	
Net loss	 	$	(79,115	)	$	(42,238	)	
Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	
Depreciation and amortization	 	19,410	 	36,201	 	
Amortization of deferred financing costs	 	487	 	2,220	 	
Amortization of time charters acquired	 	—	 	(49	)	
Amortization of discount on Convertible Senior Notes	 	—	 	1,299	 	
Amortization of nonvested stock compensation expense	 	12,360	 	1,390	 	
Impairment of vessel assets	 	35,396	 	—	 	
Change in assets and liabilities:	 	 	 	 	 	
Decrease in due from charterers	 	2,373	 	2,803	 	
Increase in prepaid expenses and other current assets	 	(3,504	)	(7,210	)	
Increase in accounts payable and accrued expenses	 	3,163	 	8,558	 	
Increase (decrease) in deferred revenue	 	440	 	(9	)	
Increase in lease obligations	 	203	 	100	 	
Deferred drydock costs incurred	 	(3,533	)	(5,669	)	
 	 	 	 	 	 	
Net cash used in operating activities	 	(12,320	)	(2,604	)	
 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	
Purchase of vessels, including deposits	 	(24,104	)	(17,618	)	
Purchase of other fixed assets	 	(56	)	(179	)	
Changes in deposits of restricted cash	 	19,645	 	(125	)	
 	 	 	 	 	 	
Net cash used in investing activities	 	(4,515	)	(17,922	)	
 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	
Repayments on the $100 Million Term Loan Facility	 	(1,923	)	(1,923	)	
Repayments on the $253 Million Term Loan Facility	 	(5,292	)	(5,075	)	
Proceeds from the Baltic Trading $148 Million Credit Facility	 	115,000	 	—	 	
Repayments on the 2010 Baltic Trading Credit Facility	 	(102,250	)	—	 	
Repayments on the Baltic Trading $22 Million Term Loan Facility	 	(375	)	(375	)	
Repayments on the Baltic Trading $44 Million Term Loan Facility	 	(687	)	(687	)	
Payment of dividend by subsidiary	 	—	 	(1,534	)	
Cash settlement of non-accredited Note holders	 	(49	)	—	 	
Payment of common stock issuance costs by subsidiary	 	—	 	(106	)	
Payment of deferred financing costs	 	(2,220	)	(88	)	
 	 	 	 	 	 	
Net cash provided by (used in) financing activities	 	2,204	 	(9,788	)	
 	 	 	 	 	 	
Net decrease in cash and cash equivalents	 	(14,631	)	(30,314	)	
 	 	 	 	 	 	
Cash and cash equivalents at beginning of period	 	83,414	 	122,722	 	
Cash and cash equivalents at end of period	 	$	68,783	 	$	92,408	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
(U.S. Dollars in Thousands, Except Per Share and Share Data)
Notes to Condensed Consolidated Financial Statements (unaudited) 
 
1 - GENERAL INFORMATION
 
The accompanying condensed consolidated financial statements include the accounts of Genco Shipping & Trading Limited (“GS&T”), its wholly-owned subsidiaries, and its subsidiary, Baltic Trading Limited (collectively, the “Company”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. GS&T is incorporated under the laws of the Marshall Islands and as of March 31, 2015, is the sole owner of all of the outstanding shares of the following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; Genco RE Investments LLC; and the ship-owning subsidiaries as set forth below.  As of March 31, 2015, Genco Ship Management LLC is the sole owner of all of the outstanding shares of Genco Management (USA) Limited.
 
Bankruptcy Filing
 
On April 21, 2014 (the “Petition Date”), GS&T and its subsidiaries other than Baltic Trading Limited (“Baltic Trading”) and its subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors continued to operate their businesses in the ordinary course as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Through the Chapter 11 Cases, the Debtors implemented a Prepackaged Plan of Reorganization of the Debtors Pursuant to Chapter 11 of the Bankruptcy Code (the “Prepack Plan”) for which the Company solicited votes from certain classes of its creditors prior to commencement of the Chapter 11 Cases in accordance with the Restructuring Support Agreement that the Debtors entered into with certain of its creditors on April 3, 2014.  The Company subsequently emerged from bankruptcy on July 9, 2014 (the “Effective Date”).  Refer to the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2014, as amended, for further detail regarding the bankruptcy filing.
 
Financial Statement Presentation
 
Upon the Company’s emergence from the Chapter 11 Cases on July 9, 2014, the Company adopted fresh-start reporting in accordance with provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, “Reorganizations” (“ASC 852”).  Upon adoption of fresh-start reporting, the Company’s assets and liabilities were recorded at their value as of the fresh-start reporting date.  The fair values of the Company’s assets and liabilities in conformance with ASC 805, “Business Combinations,” as of that date differed materially from the recorded values of its assets and liabilities as reflected in its historical consolidated financial statements.  In addition, the Company’s adoption of fresh-start reporting may materially affect its results of operations following the fresh-start reporting dates, as the Company will have a new basis in its assets and liabilities.  Consequently, the Company’s historical financial statements may not be reliable indicators of its financial condition and results of operations for any period after it adopted fresh-start reporting.  As a result of the adoption of fresh-start reporting, the Company’s consolidated balance sheets and consolidated statements of operations subsequent to July 9, 2014 will not be comparable in many respects to our consolidated balance sheets and consolidated statements of operations prior to July 9, 2014.  References to “Successor Company” refer to the Company after July 9, 2014, after giving effect to the application of fresh-start reporting.  References to “Predecessor Company” refer to the Company prior to July 9, 2014.
 
Merger Agreement with Baltic Trading
 
On April 7, 2015, the Company entered into a definitive merger agreement with Baltic Trading under which the Company will acquire Baltic Trading in a stock-for-stock transaction.  Under the terms of the agreement, Baltic Trading will become an indirect wholly-owned subsidiary of the Company, and Baltic Trading shareholders (other than the Company and its subsidiaries) will receive 0.216 shares of the Company’s common stock for each share of Baltic Trading’s common stock they own at closing, with fractional shares to be settled in cash.  Upon consummation of the transaction, the Company’s shareholders are expected to own approximately 84.5% of the combined company, and Baltic Trading’s shareholders (other than the Company and its subsidiaries) are expected to own approximately 15.5% of the combined company.  Shares of Baltic Trading’s Class B stock (all of which are owned by the Company) will be canceled in the merger.  The Company expects to have it stock listed on the New York Stock Exchange upon consummation of the transaction.
 
The Boards of Directors of both the Company and Baltic Trading established independent special committees to review the transaction and negotiate the terms on behalf of their respective companies.  Both independent special committees unanimously approved the transaction.  The Boards of Directors of both companies approved the merger by unanimous vote of directors present and
 
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voting, with Peter C. Georgiopoulos, Chairman of the Board of each company, recused for the vote.  Approval of the merger is subject to a vote of shareholders of both the Company and Baltic Trading.
 
Acquisition of Baltic Lion and Baltic Tiger
 
Additionally, on April 7, 2015, the Company entered into an agreement under which the Company acquired all of the shares of two single-purpose vessel owning entities that were wholly owned by Baltic Trading, each of which owns one Capesize drybulk vessel, specifically the Baltic Lion and Baltic Tiger, for an aggregate purchase price of $68,500, subject to reduction for $40,563 of outstanding first-mortgage debt of such single-purpose entities that is to be guaranteed by the Company.  For further details, refer to the “Impairment of vessel assets” Section in Note 2 — Summary of Significant Accounting Policies.  These transactions, which closed on April 8, 2015, will be accounted for pursuant to accounting guidance under ASC 805, “Business Combinations”, for transactions amongst entities under common control.  Accordingly, the difference between the cash paid to Baltic Trading and the Company’s carrying value of the Baltic Lion and Baltic Tiger as of the closing date will be reflected as an adjustment to Additional paid-in capital.  The independent special committees of both companies’ Boards of Directors reviewed and approved these transactions.
 
Other General Information
 
Below is the list of GS&T’s wholly owned ship-owning subsidiaries as of March 31, 2015:

Wholly Owned Subsidiaries	 	Vessel Acquired	 	Dwt	 	Delivery Date	 	Year Built	 	
 	 	 	 	 	 	 	 	 	 	
Genco Reliance Limited	 	Genco Reliance	 	29,952	 	12/6/04	 	1999	 	
Genco Vigour Limited	 	Genco Vigour	 	73,941	 	12/15/04	 	1999	 	
Genco Explorer Limited	 	Genco Explorer	 	29,952	 	12/17/04	 	1999	 	
Genco Carrier Limited	 	Genco Carrier	 	47,180	 	12/28/04	 	1998	 	
Genco Sugar Limited	 	Genco Sugar	 	29,952	 	12/30/04	 	1998	 	
Genco Pioneer Limited	 	Genco Pioneer	 	29,952	 	1/4/05	 	1999	 	
Genco Progress Limited	 	Genco Progress	 	29,952	 	1/12/05	 	1999	 	
Genco Wisdom Limited	 	Genco Wisdom	 	47,180	 	1/13/05	 	1997	 	
Genco Success Limited	 	Genco Success	 	47,186	 	1/31/05	 	1997	 	
Genco Beauty Limited	 	Genco Beauty	 	73,941	 	2/7/05	 	1999	 	
Genco Knight Limited	 	Genco Knight	 	73,941	 	2/16/05	 	1999	 	
Genco Leader Limited	 	Genco Leader	 	73,941	 	2/16/05	 	1999	 	
Genco Marine Limited	 	Genco Marine	 	45,222	 	3/29/05	 	1996	 	
Genco Prosperity Limited	 	Genco Prosperity	 	47,180	 	4/4/05	 	1997	 	
Genco Muse Limited	 	Genco Muse	 	48,913	 	10/14/05	 	2001	 	
Genco Acheron Limited	 	Genco Acheron	 	72,495	 	11/7/06	 	1999	 	
Genco Surprise Limited	 	Genco Surprise	 	72,495	 	11/17/06	 	1998	 	
Genco Augustus Limited	 	Genco Augustus	 	180,151	 	8/17/07	 	2007	 	
Genco Tiberius Limited	 	Genco Tiberius	 	175,874	 	8/28/07	 	2007	 	
Genco London Limited	 	Genco London	 	177,833	 	9/28/07	 	2007	 	
Genco Titus Limited	 	Genco Titus	 	177,729	 	11/15/07	 	2007	 	
Genco Challenger Limited	 	Genco Challenger	 	28,428	 	12/14/07	 	2003	 	
Genco Charger Limited	 	Genco Charger	 	28,398	 	12/14/07	 	2005	 	
Genco Warrior Limited	 	Genco Warrior	 	55,435	 	12/17/07	 	2005	 	
Genco Predator Limited	 	Genco Predator	 	55,407	 	12/20/07	 	2005	 	
Genco Hunter Limited	 	Genco Hunter	 	58,729	 	12/20/07	 	2007	 	
Genco Champion Limited	 	Genco Champion	 	28,445	 	1/2/08	 	2006	 	
Genco Constantine Limited	 	Genco Constantine	 	180,183	 	2/21/08	 	2008	 	
Genco Raptor LLC	 	Genco Raptor	 	76,499	 	6/23/08	 	2007	 	
Genco Cavalier LLC	 	Genco Cavalier	 	53,617	 	7/17/08	 	2007	 	
Genco Thunder LLC	 	Genco Thunder	 	76,588	 	9/25/08	 	2007	 	
Genco Hadrian Limited	 	Genco Hadrian	 	169,694	 	12/29/08	 	2008	 	
Genco Commodus Limited	 	Genco Commodus	 	169,025	 	7/22/09	 	2009	 	
Genco Maximus Limited	 	Genco Maximus	 	169,025	 	9/18/09	 	2009	 	
 
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Wholly Owned Subsidiaries	 	Vessel Acquired	 	Dwt	 	Delivery Date	 	Year Built	 	
Genco Claudius Limited	 	Genco Claudius	 	169,025	 	12/30/09	 	2010	 	
Genco Bay Limited	 	Genco Bay	 	34,296	 	8/24/10	 	2010	 	
Genco Ocean Limited	 	Genco Ocean	 	34,409	 	7/26/10	 	2010	 	
Genco Avra Limited	 	Genco Avra	 	34,391	 	5/12/11	 	2011	 	
Genco Mare Limited	 	Genco Mare	 	34,428	 	7/20/11	 	2011	 	
Genco Spirit Limited	 	Genco Spirit	 	34,432	 	11/10/11	 	2011	 	
Genco Aquitaine Limited	 	Genco Aquitaine	 	57,981	 	8/18/10	 	2009	 	
Genco Ardennes Limited	 	Genco Ardennes	 	57,981	 	8/31/10	 	2009	 	
Genco Auvergne Limited	 	Genco Auvergne	 	57,981	 	8/16/10	 	2009	 	
Genco Bourgogne Limited	 	Genco Bourgogne	 	57,981	 	8/24/10	 	2010	 	
Genco Brittany Limited	 	Genco Brittany	 	57,981	 	9/23/10	 	2010	 	
Genco Languedoc Limited	 	Genco Languedoc	 	57,981	 	9/29/10	 	2010	 	
Genco Loire Limited	 	Genco Loire	 	53,416	 	8/4/10	 	2009	 	
Genco Lorraine Limited	 	Genco Lorraine	 	53,416	 	7/29/10	 	2009	 	
Genco Normandy Limited	 	Genco Normandy	 	53,596	 	8/10/10	 	2007	 	
Genco Picardy Limited	 	Genco Picardy	 	55,257	 	8/16/10	 	2005	 	
Genco Provence Limited	 	Genco Provence	 	55,317	 	8/23/10	 	2004	 	
Genco Pyrenees Limited	 	Genco Pyrenees	 	57,981	 	8/10/10	 	2010	 	
Genco Rhone Limited	 	Genco Rhone	 	58,018	 	3/29/11	 	2011	 	
 
Baltic Trading Limited was a wholly-owned indirect subsidiary of GS&T until Baltic Trading completed its initial public offering, or IPO, on March 15, 2010.  As of March 31, 2015 and December 31, 2014, Genco Investments LLC owned 6,356,471 shares of Baltic Trading’s Class B Stock, which represented a 10.85% ownership interest in Baltic Trading and 64.60% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock.  Additionally, pursuant to the subscription agreement between Genco Investments LLC and Baltic Trading, for so long as GS&T directly or indirectly holds at least 10% of the aggregate number of outstanding shares of Baltic Trading’s common stock and Class B stock, Genco Investments LLC will be entitled to receive an additional number of shares of Baltic Trading’s Class B stock equal to 2% of the number of common shares issued in the future, other than shares issued under Baltic Trading’s Equity Incentive Plans and shares issued in conjunction with the merger.
 
Below is the list of Baltic Trading’s wholly owned ship-owning subsidiaries as of March 31, 2015:

Baltic Trading’s Wholly Owned
Subsidiaries	 	Vessel Acquired	 	Dwt	 	Delivery Date	 	Year
Built	 	
 	 	 	 	 	 	 	 	 	 	
Baltic Leopard Limited	 	Baltic Leopard	 	53,447	 	4/8/10	 	2009	 	
Baltic Panther Limited	 	Baltic Panther	 	53,351	 	4/29/10	 	2009	 	
Baltic Cougar Limited	 	Baltic Cougar	 	53,432	 	5/28/10	 	2009	 	
Baltic Jaguar Limited	 	Baltic Jaguar	 	53,474	 	5/14/10	 	2009	 	
Baltic Bear Limited	 	Baltic Bear	 	177,717	 	5/14/10	 	2010	 	
Baltic Wolf Limited	 	Baltic Wolf	 	177,752	 	10/14/10	 	2010	 	
Baltic Wind Limited	 	Baltic Wind	 	34,409	 	8/4/10	 	2009	 	
Baltic Cove Limited	 	Baltic Cove	 	34,403	 	8/23/10	 	2010	 	
Baltic Breeze Limited	 	Baltic Breeze	 	34,386	 	10/12/10	 	2010	 	
Baltic Fox Limited	 	Baltic Fox	 	31,883	 	9/6/13	 	2010	 	
Baltic Hare Limited	 	Baltic Hare	 	31,887	 	9/5/13	 	2009	 	
Baltic Lion Limited	 	Baltic Lion	 	179,185	 	12/27/13	 	2012	 	
Baltic Tiger Limited	 	Baltic Tiger	 	179,185	 	11/26/13	 	2011	 	
Baltic Hornet Limited	 	Baltic Hornet	 	63,574	 	10/29/2014	 	2014	 	
Baltic Wasp Limited	 	Baltic Wasp	 	63,389	 	1/2/2015	 	2015	 	
Baltic Scorpion Limited	 	Baltic Scorpion	 	64,000	 	Q2 2015 (1)	 	2015 (1)	 	
Baltic Mantis Limited	 	Baltic Mantis	 	64,000	 	Q3 2015 (1)	 	2015 (1)	 	

(1)          Built dates and delivery dates for vessels being delivered in the future are estimates based on the guidance received from the sellers and the respective shipyards.
 
The Company provides technical services for drybulk vessels purchased by Maritime Equity Partners LLC (“MEP”).  Peter C. Georgiopoulos, Chairman of the Board of Directors of GS&T, controls and has a minority interest in MEP.  These services include
 
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oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services are provided for a fee of $750 per ship per day plus reimbursement of out-of-pocket costs and were provided for an initial term of one year.  MEP has the right to cancel provision of services on 60 days’ notice with payment of a one-year termination fee upon a change in control of the Company.  The Company may terminate provision of the services at any time on 60 days’ notice.
 
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Principles of consolidation
 
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which include the accounts of GS&T, its wholly-owned subsidiaries and Baltic Trading, a subsidiary in which the Company owns a majority of the voting interests and exercises control.  All intercompany accounts and transactions have been eliminated in consolidation.
 
Basis of presentation
 
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”).  In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.  These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2014, as amended (the “2014 10-K”).  The results of operations for the periods ended March 31, 2015 and 2014 for the Successor Company and Predecessor Company, respectively, are not necessarily indicative of the operating results for the full year.
 
Vessels, net
 
Vessels, net is stated at cost less accumulated depreciation. Included in vessel costs are acquisition costs directly attributable to the acquisition of a vessel and expenditures made to prepare the vessel for its initial voyage. The Company also capitalizes interest costs for a vessel under construction as a cost which is directly attributable to the acquisition of a vessel. Vessels are depreciated on a straight-line basis over their estimated useful lives, determined to be 25 years from the date of initial delivery from the shipyard. Depreciation expense for vessels for the Successor Company and the Predecessor Company for the three months ended March 31, 2015 and 2014 was $18,967 and $34,160, respectively.
 
Depreciation expense is calculated based on cost less the estimated residual scrap value. The costs of significant replacements, renewals and betterments are capitalized and depreciated over the shorter of the vessel’s remaining estimated useful life or the estimated life of the renewal or betterment. Undepreciated cost of any asset component being replaced that was acquired after the initial vessel purchase is written off as a component of vessel operating expense. Expenditures for routine maintenance and repairs are expensed as incurred. Scrap value is estimated by the Company by taking the cost of steel times the weight of the ship noted in lightweight tons (lwt).  Effective July 9, 2014, the Company increased the estimated scrap value of the vessels from $245 per lwt to $310 per lwt prospectively based on the 15-year average scrap value of steel.  During the three months ended March 31, 2015, the increase in the estimated scrap value resulted in a decrease in depreciation expense of $787. The decrease in depreciation expense resulted in a $0.01 change to the basic and diluted net loss per share during the three months ended March 31, 2015.  The basic and diluted net loss per share would have been ($0.65) per share if there were no change in the estimated scrap value.
 
Deferred revenue
 
Deferred revenue primarily relates to cash received from charterers prior to it being earned. These amounts are recognized as income when earned. Additionally, deferred revenue includes estimated customer claims mainly due to time charter performance issues. As of March 31, 2015 and December 31, 2014, the Company had an accrual of $725 and $662, respectively, related to these estimated customer claims.
 
Voyage expense recognition
 
In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. There are certain other non-specified voyage expenses, such as commissions, which are typically borne by the Company. At
 
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the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. These differences in bunkers resulted in a net loss (gain) of $1,453 and ($66) during the three months ended March 31, 2015 and 2014 for the Successor Company and Predecessor Company, respectively.  Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.
 
Impairment of vessel assets
 
During the three months ended March 31, 2015, the Successor Company recorded $35,396 related to the impairment of vessel assets in accordance with ASC 360 — “Property, Plant and Equipment” (“ASC 360”).  At March 31, 2015, the Company determined that the sale of the Baltic Lion and Baltic Tiger was more likely than not based on Baltic Trading’s expressed consideration to divest of those vessels.  Therefore, the time utilized to determine the recoverability of the carrying value of the vessel assets was significantly reduced, and after determining that the sum of the estimated undiscounted future cash flows attributable to the Baltic Lion and Baltic Tiger would not exceed the carrying value of the respective vessels, the Company reduced the carrying value of each vessel to its estimated fair value, which was determined primarily based on appraisals and third-party broker quotes.  Subsequent to March 31, 2015, the Baltic Lion and Baltic Tiger entities were sold to GS&T.   Refer to Note 1 — General Information for details pertaining to the sale of these entities.
 
Noncontrolling interest
 
Net loss attributable to noncontrolling interest during the three months ended March 31, 2015 and 2014 reflects the noncontrolling interest’s share of the net loss of Baltic Trading, a subsidiary of the Company, which owns and employs drybulk vessels in the spot market, in vessel pools or on spot market-related time charters.  The spot market represents immediate chartering of a vessel, usually for single voyages.  At March 31, 2015 and December 31, 2014, the noncontrolling interest held an 89.15% economic interest in Baltic Trading while only holding 35.40% of the voting power.
 
Income taxes
 
Pursuant to certain agreements, GS&T technically and commercially manages vessels for Baltic Trading, as well as provides technical management of vessels for MEP in exchange for specified fees for these services provided.  These services are performed by Genco Management (USA) Limited (“Genco (USA)”), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) is subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services.  Genco (USA) has entered into a cost-sharing agreement with the Company and Genco Ship Management LLC, collectively Manco, pursuant to which Genco (USA) agrees to reimburse Manco for the costs incurred by Genco (USA) for the use of Manco’s personnel and services in connection with the provision of the services for both Baltic Trading and MEP’s vessels.
 
Total revenue earned by the Successor Company for these services during the three months ended March 31, 2015 was $2,189 of which $1,379 eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $1,198 associated with these activities for the three months ended March 31, 2015.  This resulted in estimated tax expense of $520 for the three months ended March 31, 2015.  Total revenue earned by the Predecessor Company for these services during the three months ended March 31, 2014 was $1,855 of which $1,045 eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $886 associated with these activities for the three months ended March 31, 2014.  This resulted in estimated tax expense of $400 for the three months ended March 31, 2014.
 
Baltic Trading is subject to income tax on its United States source income.  During the three months ended March 31, 2015 and 2014, Baltic Trading had United States operations that resulted in United States source income of $587 and $284, respectively.  Baltic Trading’s estimated United States income tax expense for the three months ended March 31, 2015 and 2014 was $23 and $12, respectively.
 
3 - SEGMENT INFORMATION
 
The Company determines its operating segments based on the information utilized by the chief operating decision maker to assess performance and make decisions about allocating the Company’s resources.  Based on this information, the Company has two reportable operating segments, GS&T and Baltic Trading.  Both GS&T and Baltic Trading are engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels.  GS&T and Baltic Trading seek to deploy their vessels on time charters, spot market-related time charters or in vessel pools trading in the spot market.  Segment results are evaluated based on net (loss) income.  The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s condensed consolidated financial statements.  As a result of the adoption of fresh-start reporting on the
 
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Effective Date, the cost basis for certain of Baltic Trading’s assets were revalued and are reflected in the Baltic Trading balances in the segment information reported below.
 
The following table presents a reconciliation of total voyage revenue from external (third party) customers for the Company’s two operating segments to total consolidated voyage revenue from external customers for the Company for the three months ended March 31, 2015 and 2014.

 	 	Successor	 	Predecessor	 	
 	 	For the Three
Months Ended
March 31, 
 2015	 	For the Three
Months Ended
March 31, 
 2014	 	
Voyage Revenue from External Customers	 	 	 	 	 	
GS&T	 	$	26,698	 	$	50,089	 	
Baltic Trading	 	6,911	 	13,091	 	
Total operating segments	 	33,609	 	63,180	 	
Eliminating revenue	 	—	 	—	 	
Total consolidated voyage revenue from external customers	 	$	33,609	 	$	63,180	 	
 
The following table presents a reconciliation of total intersegment revenue, which eliminates upon consolidation, for the Company’s two operating segments for the three months ended March 31, 2015 and 2014. The intersegment revenue noted in the following table represents revenue earned by GS&T pursuant to the management agreement entered into with Baltic Trading, which includes commercial service fees, technical service fees and sale and purchase fees, if any.

 	 	Successor	 	Predecessor	 	
 	 	For the Three
Months Ended
March 31, 
 2015	 	For the Three
Months Ended
March 31, 
 2014	 	
Intersegment revenue	 	 	 	 	 	
GS&T	 	$	1,379	 	$	1,045	 	
Baltic Trading	 	—	 	—	 	
Total operating segments	 	1,379	 	1,045	 	
Eliminating revenue	 	(1,379	)	(1,045	)	
Total consolidated intersegment revenue	 	$	—	 	$	—	 	
 
The following table presents a reconciliation of total net loss for the Company’s two operating segments to total consolidated net loss for the three months ended March 31, 2015 and 2014. The eliminating net loss noted in the following table consists of the elimination of intercompany transactions between GS&T and Baltic Trading, as well as dividends received by GS&T from Baltic Trading for its Class B shares of Baltic Trading, if applicable.

 	 	Successor	 	Predecessor	 	
 	 	For the Three
Months Ended
March 31, 
 2015	 	For the Three
Months Ended
March 31, 
 2014	 	
Net loss	 	 	 	 	 	
GS&T	 	$	(33,029	)	$	(38,569	)	
Baltic Trading	 	(45,811	)	(3,533	)	
Total operating segments	 	(78,840	)	(42,102	)	
Eliminating net loss	 	275	 	136	 	
Total consolidated net loss	 	$	(79,115	)	$	(42,238	)	
 
The following table presents a reconciliation of total assets for the Company’s two operating segments to total consolidated assets as of March 31, 2015 and December 31, 2014. The eliminating assets noted in the following table consist of the elimination of intercompany transactions resulting from the capitalization of fees paid to GS&T by Baltic Trading as vessel assets, including related accumulated depreciation, as well as the outstanding receivable balance due to GS&T from Baltic Trading as of March 31, 2015 and December 31, 2014.
 
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 	 	Successor	 	Successor	 	
 	 	March 31, 
 2015	 	December 31,
2014	 	
Total assets	 	 	 	 	 	
GS&T	 	$	1,245,703	 	$	1,270,923	 	
Baltic Trading	 	451,181	 	482,415	 	
Total operating segments	 	1,696,884	 	1,753,338	 	
Eliminating assets	 	(2,065	)	(425	)	
Total consolidated assets	 	$	1,694,819	 	$	1,752,913	 	
 
4 - CASH FLOW INFORMATION
 
For the three months ended March 31, 2015, the Successor Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $402 for the Purchase of vessels, including deposits and $98 for the Purchase of other fixed assets.  Additionally, for the three months ended March 31, 2015, the Successor Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $247 associated with the Payment of deferred financing fees. Lastly, for the three months ended March 31, 2015, the Successor Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $414 associated with the Cash settlement of non-accredited Note holders.  During the three months ended March 31, 2015, the Successor Company increased the estimated amount of non-accredited holders of the Convertible Senior Notes, which was discharged on the Effective Date, that are expected to be settled in cash versus settled with common shares.
 
For the three months ended March 31, 2014, the Predecessor Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $213 for the Purchase of vessels, including deposits and $145 for the Purchase of other fixed assets.  For the three months ended March 31, 2014, the Predecessor Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $253 associated with the Payment of deferred financing fees and $5 for the Payment of common stock issuance costs by its subsidiary.  Additionally, for the three months ended March 31, 2014, the Predecessor Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in current Interest payable consisting of $13,199 associated with the Payment of deferred financing fees.
 
Professional fees and trustee fees in the amount of $520 were recognized by the Successor Company in Reorganization items, net for the three months ended March 31, 2015 (refer to Note 19).  During this period, $709 of professional fees and trustee fees were paid through March 31, 2015 and $124 is included in Accounts payable and accrued expenses as of March 31, 2015.
 
During the three months ended March 31, 2015, the Successor Company made a reclassification of $9,694 from Deposits on vessels to Vessels, net of accumulated depreciation, due to the completion of the purchase of Baltic Wasp. No such reclassifications were made during the three months ended March 31, 2014.
 
During the three months ended March 31, 2014, the Predecessor Company made a reclassification of $984 from Fixed assets, net of accumulated depreciation, to Vessels, net of accumulated depreciation, for items that should be capitalized and depreciated over the remaining life of the respective vessels.
 
During the three months ended March 31, 2015 and 2014, cash paid for interest by the Successor Company and the Predecessor Company, net of amounts capitalized, and including bond coupon interest paid during the three months ended March 31, 2014, was $3,203 and $14,163, respectively.
 
During the three months ended March 31, 2015 and 2014, cash paid for estimated income taxes by the Successor Company and Predecessor Company was $454 and $1,072, respectively.

5 - VESSEL ACQUISITIONS
 
On November 13, 2013, Baltic Trading entered into agreements to purchase up to four 64,000 dwt Ultramax newbuilding drybulk vessels from Yangfan Group Co., Ltd. for a purchase price of $28,000 per vessel, or up to $112,000 in the aggregate.  Baltic Trading agreed to purchase two such vessels, to be renamed the Baltic Hornet and Baltic Wasp, and obtained an option to purchase up to two additional such vessels for the same purchase price, which Baltic Trading exercised on January 8, 2014. These vessels are to be
 
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renamed the Baltic Mantis and the Baltic Scorpion. The purchases are subject to completion of customary additional documentation and closing conditions. The first of these vessels, the Baltic Hornet, was delivered to Baltic Trading on October 29, 2014.  The Baltic Wasp was delivered to Baltic Trading on January 2, 2015.  The Baltic Scorpion and the Baltic Mantis are expected to be delivered to Baltic Trading during the second and third quarters of 2015, respectively. As of March 31, 2015 and December 31, 2014, deposits on vessels were $19,237 and $25,593, respectively.  Baltic Trading intends to use a combination of cash on hand, future cash flow from operations as well as debt or equity financing, including the Baltic Trading $148 Million Credit Facility as described in Note 9 — Debt, to fully finance the acquisition of the remaining two Ultramax newbuilding drybulk vessels.  On December 30, 2014, Baltic Trading paid $19,645 for the final payment due for the Baltic Wasp which was classified as noncurrent Restricted Cash in the Condensed Consolidated Balance Sheets as of December 31, 2014 as the payment was held in an escrow account and was released to the seller when the vessel was delivered to Baltic Trading on January 2, 2015.
 
Refer to Note 1 — General Information for a listing of the vessel delivery dates for the vessels in the Company’s fleet and the estimated delivery dates for vessels that Baltic Trading has entered into agreements to purchase.
 
Below market time charters, including those acquired during previous periods, were amortized as an increase to voyage revenue in the amount of $49 by the Predecessor Company during the three months ended March 31, 2014.  The remaining unamortized fair market value of Time charters acquired at December 31, 2014 was $0.  As part of fresh-start reporting, the remaining liability for below market time charters was written-off during the re-valuation of our liabilities.
 
Capitalized interest expense associated with the newbuilding contracts entered into by Baltic Trading recorded by the Successor Company and the Predecessor Company for the three months ended March 31, 2015 and 2014 was $124 and $98, respectively.
 
6 - INVESTMENTS
 
The Company holds an investment in the capital stock of Jinhui Shipping and Transportation Limited (“Jinhui”) and Korea Line Corporation (“KLC”).  Jinhui is a drybulk shipping owner and operator focused on the Supramax segment of drybulk shipping.  KLC is a marine transportation service company that operates a fleet of carriers which includes carriers for iron ore, liquefied natural gas and tankers for oil and petroleum products.  These investments are designated as Available For Sale (“AFS”) and are reported at fair value, with unrealized gains and losses recorded in equity as a component of accumulated other comprehensive income (loss) (“AOCI”).  At March 31, 2015 and December 31, 2014, the Company held 16,335,100 shares of Jinhui capital stock which is recorded at its fair value of $28,776 and $26,414, respectively, based on the last closing price during each respective quarter on March 31, 2015 and December 30, 2014, respectively.  At March 31, 2015 and December 31, 2014, the Company held 3,355 shares of KLC stock which is recorded at its fair value of $69 and $72, respectively, based on the last closing price during each respective quarter on March 31, 2015 and December 30, 2014.
 
The Company reviews the investment in Jinhui and KLC for impairment on a quarterly basis.  There were no impairment charges recognized for the three months ended March 31, 2015 and 2014.
 
The unrealized gain (losses) on the Jinhui capital stock and KLC stock are a component of AOCI since these investments are designated as AFS securities.  As part of fresh-start reporting, the Company revised its cost basis for its investments in Jinhui and KLC based on their fair values on the Effective Date.
 
Refer to Note 12 — Accumulated Other Comprehensive Income (Loss) for a breakdown of the components of AOCI.
 
7 — NET LOSS PER COMMON SHARE
 
The computation of basic net loss per share is based on the weighted-average number of common shares outstanding during the year. The computation of diluted net loss per share assumes the vesting of nonvested stock awards (refer to Note 21 — Stock-Based Compensation), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive.  Of the 1,110,600 nonvested shares outstanding at March 31, 2015 (refer to Note 21 — Stock-Based Compensation), all are anti-dilutive.  The Successor Company’s diluted net loss per share will also reflect the assumed conversion of the equity warrants issued on the Effective Date and MIP Warrants issued by the Successor Company (refer to Note 21 — Stock-Based Compensation) if the impact is dilutive under the
 
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treasury stock method.  The Predecessor Company’s diluted net loss per share will also reflect the assumed conversion under the Predecessor Company’s convertible debt if the impact is dilutive under the “if converted” method. The impact of the shares convertible under the Predecessor Company’s convertible notes is excluded from the computation of diluted earnings per share when interest expense per common share obtainable upon conversion is greater than basic earnings per share.
 
The components of the denominator for the calculation of basic net loss per share and diluted net loss per share are as follows:

 	 	Successor	 	Predecessor	 	
 	 	Three Months
Ended March 31, 
 2015	 	Three Months
Ended March 31, 
 2014	 	
 	 	 	 	 	 	
Common shares outstanding, basic:	 	 	 	 	 	
Weighted-average common shares outstanding, basic	 	60,430,789	 	43,568,942	 	
 	 	 	 	 	 	
Common shares outstanding, diluted:	 	 	 	 	 	
Weighted-average common shares outstanding, basic	 	60,430,789	 	43,568,942	 	
 	 	 	 	 	 	
Dilutive effect of warrants	 	—	 	—	 	
 	 	 	 	 	 	
Dilutive effect of convertible notes	 	—	 	—	 	
 	 	 	 	 	 	
Dilutive effect of restricted stock awards	 	—	 	—	 	
 	 	 	 	 	 	
Weighted-average common shares outstanding, diluted	 	60,430,789	 	43,568,942	 	
 
The following table sets forth a reconciliation of the net loss attributable to GS&T and the net loss attributable to GS&T for diluted net loss per share under the “if-converted” method:

 	 	Successor	 	Predecessor	 	
 	 	Three Months
Ended March 31, 
 2015	 	Three Months
Ended March 31, 
 2014	 	
 	 	 	 	 	 	
Net loss attributable to GS&T	 	$	(38,442	)	$	(39,105	)	
 	 	 	 	 	 	
Interest expense related to convertible notes, if dilutive	 	—	 	—	 	
 	 	 	 	 	 	
Net loss attributable to GS&T for the computation of diluted net loss per share	 	$	(38,442	)	$	(39,105	)	
 
8 - RELATED PARTY TRANSACTIONS
 
The following represent related party transactions reflected in these condensed consolidated financial statements:
 
Until December 31, 2014, the Company made available employees performing internal audit services to General Maritime Corporation (“GMC”), where the Company’s Chairman, Peter C. Georgiopoulos, also serves as Chairman of the Board.  For the three months ended March 31, 2014, the Predecessor Company invoiced $35 to GMC, which includes time associated with such internal audit services and other expenditures.  Additionally, during the three months ended March 31, 2015 and 2014, the Successor Company and Predecessor Company incurred travel and other office related expenditures totaling $30 and $28, respectively, reimbursable to GMC or its service provider.  At March 31, 2015 and December 31, 2014, the amount due to GMC from the Company was $30 and $41, respectively.
 
During the three months ended March 31, 2015 and 2014, the Successor Company and Predecessor Company incurred legal services (primarily in connection with vessel acquisitions) aggregating $8 and $3, respectively, from Constantine Georgiopoulos, the father of Peter C. Georgiopoulos, Chairman of the Board.  At March 31, 2015 and December 31, 2014, the amount due to Constantine Georgiopoulos was $2 and $9, respectively.
 
GS&T and Baltic Trading have entered into agreements with Aegean Marine Petroleum Network, Inc. (“Aegean”) to purchase lubricating oils for certain vessels in their fleets.  Peter C. Georgiopoulos, Chairman of the Board of the Company, is
 
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Chairman of the Board of Aegean.  During the three months ended March 31, 2015 and 2014, Aegean supplied lubricating oils to the Successor Company and Predecessor Company’s vessels aggregating $343 and $600, respectively.  At March 31, 2015 and December 31, 2014, $202 and $267 remained outstanding, respectively.
 
During the three months ended March 31, 2015 and 2014, the Successor Company and Predecessor Company invoiced MEP for technical services provided and expenses paid on MEP’s behalf aggregating $818 and $822, respectively.  Peter C. Georgiopoulos, Chairman of the Board, controls and has a minority interest in MEP.  At March 31, 2015 and December 31, 2014, $532 and $10, respectively, was due to the Company from MEP.  Total service revenue earned by the Successor Company and the Predecessor Company for technical service provided to MEP for the three months ended March 31, 2015 and 2014 was $810 and $810, respectively.
 
9 - DEBT
 
Long-term debt consists of the following:

 	 	Successor	 	Successor	 	
 	 	March 31, 2015	 	December 31, 2014	 	
 	 	 	 	 	 	
$100 Million Term Loan Facility	 	$	65,868	 	$	67,792	 	
$253 Million Term Loan Facility	 	160,277	 	165,568	 	
2010 Baltic Trading Credit Facility	 	—	 	102,250	 	
Baltic Trading $148 Million Credit Facility	 	115,000	 	—	 	
Baltic Trading $22 Million Term Loan Facility	 	19,750	 	20,125	 	
Baltic Trading $44 Million Term Loan Facility	 	40,563	 	41,250	 	
2014 Baltic Trading Term Loan Facilities	 	33,150	 	33,150	 	
Less: Current portion	 	(44,576	)	(34,324	)	
 	 	 	 	 	 	
Long-term debt	 	$	390,032	 	$	395,811	 	
 
$100 Million Term Loan Facility
 
On August 12, 2010, the Company entered into the $100 Million Term Loan Facility. As of March 31, 2015, the Company has utilized its maximum borrowing capacity as $100,000. The Company has used the $100 Million Term Loan Facility to fund or refund the Company a portion of the purchase price of the acquisition of five vessels from companies within the Metrostar group of companies.  As of March 31, 2015, there was no availability under the $100 Million Term Loan Facility.
 
Pursuant to the amendments to the $100 Million Term Loan Facility that were entered into on December 21, 2011 and certain agreements we entered into in August 2012 to further amend our credit facilities (the “August 2012 Agreements”), the maximum leverage ratio covenant and the minimum permitted consolidated interest ratio covenant were waived for the periods ending on and including December 31, 2013.
 
On the Effective Date, the Company entered into the Amended and Restated $100 Million Term Loan Facility and the Amended and Restated $253 Million Term Loan Facility.  The Amended and Restated Credit Facilities included, among other things:
 
·                   A paydown as of the Effective Date with respect to payments which became due under the prepetition credit facilities between the Petition Date and the Effective Date and were not paid during the pendency of the Chapter 11 Cases ($1,923 for the $100 Million Term Loan Facility and $5,075 for the $253 Million Term Loan Facility).
 
·                   Extension of the maturity dates to August 31, 2019 from August 17, 2017 for the $100 Million Term Loan Facility and August 15, 2015 for the $253 Million Term Loan Facility.
 
·                   Relief from compliance with financial covenants governing the Company’s maximum leverage ratio, minimum consolidated interest coverage ratio and consolidated net worth through and including the quarter ending March 31, 2015 (with quarterly testing commencing June 30, 2015).
 
·                   A fleetwide minimum liquidity covenant requiring maintenance of cash of $750 per vessel for all vessels owned by the Company (excluding those owned by Baltic Trading).
 
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·                   An increase in the interest rate to LIBOR plus 3.50% per year from 3.00% previously for the $100 Million Term Loan Facility and the $253 Million Term Loan Facility.
 
The obligations under the Amended and Restated $100 Million Term Loan Facility are secured by a first priority security interest in the vessels and other collateral securing the $100 Million Term Loan Facility.  The Amended and Restated $100 Million Term Loan Facility requires quarterly repayment installments in accordance with the original terms of the $100 Million Term Loan Facility.
 
On April 30, 2015, the Company entered into agreements to amend or waive certain provisions under the $100 Million Term Loan Facility and the $253 Million Term Loan Facility (the “April 2015 Amendments”) which implemented the following, among other things:
 
·                   The existing covenant measuring the Company’s ratio of net debt to EBITDA was replaced with a covenant requiring its ratio of total debt outstanding to value adjusted total assets (total assets adjusted for the difference between book value and market value of fleet vessels) to be less than 70%.
 
·                   Measurement of the interest coverage ratio under each facility is waived through and including December 31, 2016.
 
·                   The fleetwide minimum liquidity covenant has been amended to allow up to 50% of the required amount of $750 per vessel in cash to be satisfied with undrawn working capital lines with a remaining availability period of more than six months.
 
·                   The Company agreed to grant additional security for its obligation under the $253 Million Term Loan Facility consisting of four of the Company’s vessels, the Genco Thunder, the Genco Raptor, the Genco Muse and the Genco Challenger and related collateral.
 
Consenting lenders under the $100 Million Term Loan Facility and the $253 Million Term Loan Facility received an upfront
fee of $165 and $350, respectively, related to the April 2015 Amendments.
 
As of March 31, 2015, the Company believes it is in compliance with all of the financial covenants under the $100 Million Term Loan Facility, as amended.
 
Following the procurement of updated valuations in February 2015, the Company was not in compliance with the collateral maintenance test of a ratio of 130%. The collateral measurement was 122.4%, representing an approximate shortfall of $5,150.  Under the terms of the credit facility the Company would need to cover such shortfall within 30 days from the time it is notified by the security agent.  The Company was not notified by the security agent to take any remedial actions, However, on April 24, 2015, the Company added one of its unencumbered Handysize vessels, the Genco Sugar, as additional collateral to cover the shortfall and satisfy the collateral maintenance test.  The next date that valuations under this credit facility will be required is on or around August 17, 2015.
 
$253 Million Term Loan Facility
 
On August 20, 2010, the Company entered into the $253 Million Term Loan Facility.  As of March 31, 2015, the Company has utilized its maximum borrowing capacity of $253,000 to fund or refund to the Company a portion of the purchase price of the 13 vessels purchased from Bourbon SA during the third quarter of 2010 and first quarter of 2011.  As of March 31, 2015, there was no availability under the $253 Million Term Loan Facility.
 
Pursuant to the amendment to the $253 Million Term Loan Facility that was entered into on December 21, 2011 and the August 2012 Agreements, the maximum leverage ratio covenant and the minimum permitted consolidated interest ratio covenant were waived for the periods ending on and including December 31, 2013.
 
As of March 31, 2015 and December 31, 2014, the Company has deposited $9,750 that has been reflected as Restricted cash.  Restricted cash will be released only if the underlying collateral is sold or disposed of.
 
Refer to the “$100 Million Term Loan Facility” section above for a description of the Amended and Restated $253 Million Term Loan Facility that was entered into by the Company on the Effective Date as well as a description of the April 2015 Amendments that were entered into by the Company on April 30, 2015. The obligations under the Amended and Restated $253 Million Term Loan Facility are secured by a first priority security interest in the vessels and other collateral securing the $253 Million
 
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Term Loan Facility. The Amended and Restated $253 Million Term Loan Facility requires quarterly repayment installments in accordance with the original terms of the $253 Million Term Loan Facility.
 
As of March 31, 2015, the Company believes it is in compliance with all of the financial covenants under the $253 Million Term Loan Facility, as amended.
 
As of December 31, 2014, the Company believed it was in compliance with all of the financial covenants under the Amended and Restated $253 Million Term Loan Facility , except for the 135% collateral maintenance test. The actual percentage measured by the Company was 130.7% at December 31, 2014 and 134.8% on January 9, 2015 following the Company’s scheduled amortization payment of $5,075.  Under the terms of the credit facility the Company would need to cover such shortfall within 30 days from the time it was notified by the security agent.  The Company has not been notified by the security agent to take any actions to remedy this slight shortfall. The Company has been in communication with the facility’s agent and prepaid $216 of the outstanding indebtedness on March 2, 2015, which will reduce the next scheduled amortization payment of $5,075 due in early April 2015. The next date that valuations under this credit facility will be required is June 30, 2015.
 
2015 Revolving Credit Facility
 
On April 7, 2015, the Company’s wholly-owned subsidiaries, Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited (collectively, the “Subsidiaries”) entered into a loan agreement by and among the Subsidiaries, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent, security agent, and as lender, providing for a $59,500 revolving credit facility, with an uncommitted accordion feature that, if exercised, will upsize the facility up to $150,000 (the “2015 Revolving Credit Facility”).  On April 7, 2015, the Company entered into a guarantee of the obligations of the Subsidiaries under the 2015 Revolving Credit Facility, in favor of ABN AMRO Capital USA LLC.
 
Borrowings under the 2015 Revolving Credit Facility will be used for general corporate purposes including “working capital” (as defined in the 2015 Revolving Credit Facility) and to finance the purchase of drybulk vessels.  The 2015 Revolving Credit Facility has a maturity date of March 31, 2020.  Borrowings under the 2015 Revolving Credit Facility bear interest at LIBOR plus a margin based on a combination of utilization levels under the 2015 Revolving Credit Facility and a security maintenance cover ranging from 3.40% per annum to 4.25% per annum.  The commitment under the 2015 Revolving Credit Facility is subject to quarterly reductions of $1,641 to $4,137 depending on the total amount committed.  Borrowings under the 2015 Revolving Credit Facility are subject to 20 equal consecutive quarterly installment repayments commencing three months after the date of the loan agreement, or July 7, 2015.  A commitment fee of 1.5% per annum is payable on the undrawn amount of the maximum loan amount.
 
Borrowings under the 2015 Revolving Credit Facility are to be secured by liens on each of the Subsidiaries’ respective vessels; specifically, the Genco Commodus, Genco Maximus, Genco Claudius, Genco Hunter and Genco Warrior and other related assets.  Should the accordion feature be exercised, the 2015 Revolving Credit Facility will also be secured by up to six additional Capesize vessels and two additional Supramax vessels owned by other subsidiaries of the Company and other related assets.
 
The 2015 Revolving Credit Facility requires the Subsidiaries to comply with a number of customary covenants including financial covenants related to collateral maintenance, liquidity, leverage, debt service reserve and dividend restrictions.
 
On April 8, 2015, the Company drew down $25,000 on the 2015 Revolving Credit Facility for working capital purposes and to partially fund the purchase of the Baltic Lion and Baltic Tiger from Baltic Trading.
 
2010 Baltic Trading Credit Facility
 
On April 16, 2010, Baltic Trading entered into a $100,000 senior secured revolving credit facility with Nordea Bank Finland plc, acting through its New York branch (as amended, the “2010 Baltic Trading Credit Facility”).  An amendment to the 2010 Baltic Trading Credit Facility was entered into by Baltic Trading effective November 30, 2010.  Among other things, this amendment increased the commitment amount of the 2010 Baltic Trading Credit Facility from $100,000 to $150,000.  An additional amendment to the 2010 Baltic Trading Credit Facility was entered into by Baltic Trading effective August 29, 2013 (the “August 2013 Amendement”).  Among other things, the August 2013 Amendment implements the following modifications to the 2010 Baltic Trading Credit Facility:
 
·                   The requirement that certain additional vessels acquired by Baltic Trading be mortgaged as collateral under the 2010 Baltic Trading Credit Facility was eliminated.
 
·                   Restrictions on the incurrence of indebtedness by Baltic Trading and its subsidiaries were amended to apply only to those subsidiaries acting as guarantors under the 2010 Baltic Trading Credit Facility.
 
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·                   The total commitment under this facility was reduced to $110,000 and will be further reduced in three consecutive semi-annual reductions of $5,000 commencing on May 30, 2015.
 
·                   Borrowings bear interest at an applicable margin over LIBOR of 3.00% per annum if the ratio of the maximum facility amount of the aggregate appraised value of vessels mortgaged under the facility is 55% or less, measured quarterly; otherwise, the applicable margin is 3.35% per annum.
 
·                   Financial covenants corresponding to the liquidity and leverage under the Baltic Trading $22 Million Term Loan Facility (as defined below) have been incorporated into the 2010 Baltic Trading Credit Facility.
 
On December 31, 2014, Baltic Trading entered into the Baltic Trading $148 Million Credit Facility, refer to “Baltic Trading $148 Million Credit Facility” section below.  Borrowings under the Baltic Trading $148 Million Credit Facility were used to refinance Baltic Trading’s indebtedness under the 2010 Baltic Trading Credit Facility.  On January 7, 2015, Baltic Trading repaid the $102,250 outstanding under the 2010 Baltic Trading Credit Facility with borrowings from the Baltic Trading $148 Million Credit Facility.
 
Baltic Trading $22 Million Term Loan Facility
 
On August 30, 2013, Baltic Hare Limited and Baltic Fox Limited, wholly-owned subsidiaries of Baltic Trading, entered into a secured loan agreement with DVB Bank SE for a term loan facility of up to $22,000 (the “Baltic Trading $22 Million Term Loan Facility”).  Amounts borrowed and repaid under the Baltic Trading $22 Million Term Loan Facility may not be reborrowed.  This facility has a maturity date of the sixth anniversary of the drawdown date for borrowings for the second vessel to be purchased, or September 4, 2019.  Borrowings under the Baltic Trading $22 Million Term Loan Facility bear interest at the three-month LIBOR rate plus an applicable margin of 3.35% per annum. A commitment fee of 1.00% per annum is payable on the unused daily portion of the credit facility, which began accruing on August 30, 2013 and ended on September 4, 2013, the date which the entire $22,000 was borrowed.  Borrowings are to be repaid in 23 quarterly installments of $375 each commencing three months after the last vessel delivery date, or December 4, 2013, and a final payment of $13,375 due on the maturity date.
 
Borrowings under the Baltic Trading $22 Million Term Loan Facility are secured by liens on Baltic Trading’s vessels purchased with borrowings under the facility, namely the Baltic Fox and the Baltic Hare, and other related assets.  Under a Guarantee and Indemnity entered into concurrently with the Baltic Trading $22 Million Term Loan Facility, Baltic Trading agreed to guarantee the obligations of its subsidiaries under the Baltic Trading $22 Million Term Loan Facility .
 
On September  4, 2013, Baltic Hare Limited and Baltic Fox Limited made drawdowns of $10,730 and $11,270 for the Baltic Hare and the Baltic Fox, respectively.  As of March 31, 2015, Baltic Trading has utilized its maximum borrowing capacity of $22,000 and there was no further availability.  At March 31, 2015 and December 31, 2014, the total outstanding debt balance was $19,750 and $20,125, respectively.
 
As of March 31, 2015 the Company believes Baltic Trading is in compliance with all of the financial covenants under the Baltic Trading $22 Million Term Loan Facility.
 
Baltic Trading $44 Million Term Loan Facility
 
On December 3, 2013, Baltic Tiger Limited and Baltic Lion Limited, wholly-owned subsidiaries of Baltic Trading, entered into a secured loan agreement with DVB Bank SE for a term loan facility of up to $44,000 (the “Baltic Trading $44 Million Term Loan Facility”). Amounts borrowed and repaid under the Baltic Trading $44 Million Term Loan Facility may not be reborrowed.  The Baltic Trading $44 Million Term Loan Facility has a maturity date of the sixth anniversary of the drawdown date for borrowings for the second vessel to be purchased, or December 23, 2019.  Borrowings under the Baltic Trading $44 Million Term Loan Facility bear interest at the three-month LIBOR rate plus an applicable margin of 3.35% per annum. A commitment fee of 0.75% per annum is payable on the unused daily portion of the credit facility, which began accruing on December 3, 2013 and ended on December 23, 2013, the date which the entire $44,000 was borrowed.  Borrowings are to be repaid in 23 quarterly installments of $688 each commencing three months after the last drawdown date, or March 24, 2014, and a final payment of $28,188 due on the maturity date.
 
Borrowings under the Baltic Trading $44 Million Term Loan Facility are to be secured by liens on the Company’s vessels to be financed or refinanced with borrowings under the facility, namely the Baltic Tiger and the Baltic Lion, and other related assets. Upon the prepayment of $18,000 plus any additional amounts necessary to maintain compliance with the collateral maintenance covenant, Baltic Trading may have the lien on the Baltic Tiger released. Under a Guarantee and Indemnity entered into concurrently with the Baltic Trading $44 Million Term Loan Facility, Baltic Trading agreed to guarantee the obligations of its subsidiaries under the Baltic Trading $44 Million Term Loan Facility.
 
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On December 23, 2013, Baltic Tiger Limited and Baltic Lion Limited made drawdowns of $21,400 and $22,600 for the Baltic Tiger and Baltic Lion, respectively.  As of March 31, 2015, Baltic Trading has utilized its maximum borrowing capacity of $44,000 and there was no further availability.  At March 31, 2015 and December 31, 2014, the total outstanding debt balance was $40,563 and $41,250, respectively.
 
As of March 31, 2015 , the Company believes Baltic Trading is in compliance with all of the financial covenants under the Baltic Trading $44 Million Term Loan Facility.
 
On April 8, 2015, the Company acquired the entities owning the Baltic Lion and Baltic Tiger and succeeded Baltic Trading as the guarantor of the outstanding debt under the Baltic Trading $44 Million Term Loan Facility.  Refer to Note 1 — General Information for further information regarding the sale of these entities to the Company.
 
2014 Baltic Trading Term Loan Facilities
 
On October 8, 2014, Baltic Trading and its wholly-owned subsidiaries, Baltic Hornet Limited and Baltic Wasp Limited, each entered into a loan agreement and related documentation for a credit facility in a principal amount of up to $16,800 with ABN AMRO Capital USA LLC and its affiliates (the “2014 Baltic Trading Term Loan Facilities”) to partially finance the newbuilding Ultramax vessel that each subsidiary is to acquire, namely the Baltic Hornet and Baltic Wasp, respectively.  Amounts borrowed under the 2014 Baltic Trading Term Loan Facilities may not be reborrowed.  The 2014 Baltic Trading Term Loan Facilities have a ten-year term, and the facility amount is to be the lowest of 60% of the delivered cost per vessel, $16,800 per vessel, and 60% of the fair market value of each vessel at delivery.  The 2014 Baltic Trading Term Loan Facilities are insured by the China Export & Credit Insurance Corporation (Sinosure) in order to cover political and commercial risks for 95% of the outstanding principal plus interest, which will be recorded in deferred financing fees.  Borrowings under the 2014 Baltic Trading Term Loan Facilities bear interest at the three or six-month LIBOR rate plus an applicable margin of 2.50% per annum.  Borrowings are to be repaid in 20 equal consecutive semi-annual installments of 1/24 of the facility amount plus a balloon payment of 1/6 of the facility amount at final maturity.  Principal repayments will commence six months after the actual delivery date for a vessel.
 
Borrowings under the 2014 Baltic Trading Term Loan Facilities are to be secured by liens on the Baltic Trading’s vessels acquired with borrowings under these facilities, namely the Baltic Hornet and Baltic Wasp, and other related assets. Baltic Trading guarantees the obligations of the Baltic Hornet and Baltic Wasp under the 2014 Baltic Trading Term Loan Facilities.
 
On October 24, 2014, Baltic Trading drew down $16,800 for the purchase of the Baltic Hornet, which was delivered on October 29, 2014.  Additionally, on December 30, 2014, Baltic Trading drew down $16,350 for the purchase of the Baltic Wasp, which was delivered on January 2, 2015.  As of March 31, 2015, Baltic Trading has utilized its maximum borrowing capacity and there was no further availability.  At March 31, 2015 and December 31, 2014, the total outstanding debt balance was $33,150 and $33,150, respectively.
 
As of March 31, 2015, the Company believes Baltic Trading is in compliance with all of the financial covenants under the 2014 Baltic Trading Term Loan Facilities.
 
Baltic Trading $148 Million Credit Facility
 
On December 31, 2014, Baltic Trading entered into a $148,000 senior secured credit facility with Nordea Bank Finland plc, New York Branch (“Nordea”), as Administrative and Security Agent, Nordea and Skandinaviska Enskilda Banken AB (Publ) (“SEB”), as Mandated Lead Arrangers, Nordea, as Bookrunner, and the lenders (including Nordea and SEB) party thereto (the “Baltic Trading $148 Million Credit Facility”).  The Baltic Trading $148 Million Credit Facility is comprised of an $115,000 revolving credit facility and $33,000 term loan facility.  Borrowings under the revolving credit facility will be used to refinance Baltic Trading’s outstanding indebtedness under the 2010 Baltic Trading Credit Facility.  Amounts borrowed under the revolving credit facility of the Baltic Trading $148 Million Credit Facility may be re-borrowed.  Borrowings under the term loan facility of the Baltic Trading $148 Million Credit Facility may be incurred pursuant to two single term loans in an amount of $16,500 each that will be used to finance, in part, the purchase of two newbuilding Ultramax vessels that Baltic Trading has agreed to acquire, namely the Baltic Scorpion and Baltic Mantis.  Amounts borrowed under the term loan facility of the Baltic Trading $148 Million Credit Facility may not be re-borrowed.
 
The Baltic Trading $148 Million Credit Facility has a maturity date of December 31, 2019.  Borrowings under this facility bear interest at LIBOR plus an applicable margin of 3.00% per annum.  A commitment fee of 1.2% per annum is payable on the unused daily portion of the Baltic Trading $148 Million Credit Facility, which began accruing on December 31, 2014.  The commitment under the revolving credit facility of the Baltic Trading $148 Million Credit Facility is subject to equal consecutive quarterly reductions of $2,447 each beginning June 30, 2015 through September 30, 2019.  Borrowings under the term loan facility of the Baltic Trading $148 Million Credit Facility are subject to equal consecutive quarterly installment repayments commencing three
 
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months after delivery of the relevant newbuilding Ultramax vessel, each in the amount of 1/60 of the aggregate outstanding term loan.  All remaining amounts outstanding under the Baltic Trading $148 Million Credit Facility must be repaid in full on the maturity date, December 31, 2019.
 
Borrowings under the Baltic Trading $148 Million Credit Facility are secured by liens on nine of Baltic Trading’s existing vessels that have served as collateral under the 2010 Baltic Trading Credit Facility, the two newbuilding Ultramax vessels noted above, and other related assets, including existing or future time charter contracts in excess of 36 months related to the foregoing vessels.
 
The Baltic Trading $148 Million Credit Facility requires Baltic Trading to comply with a number of customary covenants substantially similar to those in the 2010 Baltic Trading Credit Facility, including financial covenants related to liquidity, leverage, consolidated net worth and collateral maintenance.
 
As of March 31, 2015, $33,000 remained available under the Baltic Trading $148 Million Credit Facility which represents the $33,000 term loan facility.
 
On January 7, 2015, Baltic Trading drew down $104,500 from the revolving credit facility of the Baltic Trading $148 Million Credit Facility.  Using these borrowings, Baltic Trading repaid the $102,250 outstanding under the 2010 Baltic Trading Facility.  Additionally, on February 27, 2015, Baltic Trading drew down $10,500 from the revolving credit facility of the Baltic Trading $148 Million Credit Facility.  Therefore, as of March 31, 2015, there was no remaining availability under the revolving credit facility of the Baltic Trading $148 Million Credit Facility.  At March 31, 2015 and December 31, 2014, the total outstanding debt balance was $115,000 and $0, respectively.
 
As of March 31, 2015, the Company believes Baltic Trading is in compliance with all of the financial covenants under the Baltic Trading $148 Million Credit Facility.
 
Change of Control
 
If the Company’s ownership in Baltic Trading were to decrease to less than 10% of the aggregate number of shares of common stock and Class B Stock of Baltic Trading, the outstanding Baltic Trading Class B Stock held by the Company would automatically convert into common stock, and the voting power held by the Company in Baltic Trading would likewise decrease to less than 30%. This would result in a change of control as defined under the Baltic Trading $148 Million Credit Facility, the Baltic Trading $22 Million Term Loan Facility, the Baltic Trading $44 Million Term Loan Facility and the 2014 Baltic Trading Term Loan Facilities, and would therefore constitute an event of default. Additionally, a change of control constituting an event of default under Baltic Trading’s credit facilities would also occur if any party other than the Company or certain other permitted holders beneficially owns more than 30% of the Company’s outstanding voting or economic equity interests, which may occur if a party were deemed to control Genco. The Prepack Plan did not result, and the Company does not expect the Prepack Plan to result, in a reduction of the Company’s ownership in Baltic Trading.  As of the date of this report, no change of control under either of the foregoing tests has occurred.  In addition, Baltic Trading has the right to terminate the Management Agreement upon the occurrence of certain events, including a Manager Change of Control (as defined in the Management Agreement), without making a termination payment.  Some of these have occurred as a result of the transactions contemplated by the Prepack Plan, including the consummation of any transaction that results in (i) any “person” (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934), other than Peter Georgiopoulos or any of his affiliates, becoming the beneficial owner of 25% of the Company’s voting securities or (ii) the Company’s stock ceasing to be traded on the New York Stock Exchange or any other internationally recognized stock exchange.  Therefore, Baltic Trading may have the right to terminate the Management Agreement, although Baltic Trading may be prevented or delayed from doing so because of the effect of applicable bankruptcy law, including the automatic stay provisions of the United States Bankruptcy Code and the provisions of the Prepack Plan and the Confirmation Order.  The Prepack Plan did not result in any changes to the Management Agreement.  However, it is anticipated that the Management Agreement will be terminated following consummation of the transactions contemplated by the Company’s definitive merger agreement with Baltic Trading .
 
On April 7, 2015, the Company entered into a definitive merger agreement with Baltic Trading, refer to Note 1 — General Information.
 
Interest rates
 
The following tables sets forth the effective interest rate associated with the interest expense for the Company’s debt facilities noted above, including the cost associated with unused commitment fees.  For the Predecessor Company for the three months ended March 31, 2014, the effective interest rate also included the rate differential between the pay fixed, receive variable rate on the interest rate swap agreements that were in effect (refer to Note 11 — Interest Rate Swap Agreements), combined, as well as the 1.0% facility
 
20 

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fee for the credit agreement entered into on July 20, 2017 with DnB Nor Bank ASA (the “2007 Credit Facility”) which was terminated on the Effective Date.  The following table also includes the range of interest rates on the debt, excluding the impact of swaps and unused commitment fees, if applicable:

 	 	Successor	 	Predecessor	 	
 	 	Three Months
Ended
March 31,
2015	 	Three Months
Ended
March 31,
2014	 	
Effective Interest Rate	 	3.69	%	4.35	%	
Range of Interest Rates (excluding impact of swaps and unused commitment fees)	 	2.73% to 3.76	%	3.15% to 4.25	%	
 
10 — CONVERTIBLE SENIOR NOTES
 
The Company issued $125,000 of the 5.0% Convertible Senior Notes on July 27, 2010 (the “2010 Notes”). The Indenture for the 2010 Notes included customary agreements and covenants by the Company, including with respect to events of default. As noted in Note 1 — General Information, the filing of the Chapter 11 Cases by the Company on April 21, 2014 constituted an event of default with respect to the 2010 Notes. On this date, the Company ceased recording interest expense related to the 2010 Notes.  On the Effective Date, when the Company emerged from Chapter 11, the 2010 Notes and the Indenture were fully satisfied and discharged.
 
The following table provides additional information about the Predecessor Company’s 2010 Notes:

 	 	Predecessor	 	
 	 	Three Months
Ended
March 31,
2014	 	
Effective interest rate on liability component	 	10.0	%	
Cash interest expense recognized	 	$	1,541	 	
Non-cash interest expense recognized	 	1,299	 	
Non-cash deferred financing amortization costs included in interest expense	 	177	 	

11 - INTEREST RATE SWAP AGREEMENTS
 
As of March 31, 2014, the Company had one interest rate swap agreement outstanding with DNB Bank ASA to manage interest costs and risk associated with variable interest rates related to the Company’s 2007 Credit Facility.  The notional amount of the swap was $106,233.  As of March 31, 2014, the Company was in default under covenants of its 2007 Credit Facility due to the default on the schedule debt amortization payment due on March 31, 2014.  The default under the 2007 Credit Facility required the Company to elect interest periods of only one-month, therefore the Company no longer qualified for hedge accounting under the original designation and hedge accounting was terminated effective March 31, 2014.  Additionally, the filing of the Chapter 11 Cases by the Company on the Petition Date constituted an event of default with respect to the outstanding interest rate swap with DNB Bank ASA.  As a result, DNB Bank ASA terminated all transactions under the remaining swap agreement effective April 30, 2014 and filed a secured claim with the Bankruptcy Court of $5,622.  The claim was paid to DNB Bank ASA by the Successor Company during the period from July 9 to September 30, 2014.
 
As of March 31, 2015 and December 31, 2014 the Company did not have any interest rate swap agreements.
 
The differentials to be paid or received for these swap agreements were recognized as an adjustment to interest expense as incurred.  The Company utilized cash flow hedge accounting for these swaps through March 31, 2014, whereby the effective portion of the change in the value of the swaps is reflected as a component of AOCI.  The ineffective portion is recognized as Other expense, which is a component of Other income (expense).  On March 31, 2014, the cash flow hedge accounting on the remaining swap agreement was discontinued.  Once cash flow hedge accounting was discontinued, the changes in the fair value of the interest rate swaps were recorded in the Condensed Consolidated Statement of Operations in Interest expense and the remaining amounts included in AOCI were amortized to Interest expense over the original term of the hedging relationship for the Predecessor Company.
 
The following tables present the impact of derivative instruments and their location within the Condensed Consolidated Statement of Operations:
 
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The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Three-Month Period Ended March 31, 2014
Predecessor Company

Derivatives in Cash
Flow Hedging	 	Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)	 	Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective	 	Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)	 	Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective	 	Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)	 	
Relationships	 	2014	 	Portion)	 	2014	 	Portion)	 	2014	 	
Interest rate contracts	 	$	(179	)	Interest Expense	 	$	(1,407	)	Other Income (Expense)	 	$	—	 	

The Company was required to provide collateral in the form of vessel assets to support the interest rate swap agreements, excluding vessel assets of Baltic Trading.  Prior to the termination of the 2007 Credit Facility on the Effective Date, the Company’s 35 vessels mortgaged under the 2007 Credit Facility served as collateral in the aggregate amount of $100,000.
 
12 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 
The components of AOCI included in the accompanying condensed consolidated balance sheets consist of net unrealized gain (loss) on cash flow hedges and net unrealized gains (losses) from investments in Jinhui stock and KLC stock for the Predecessor Company.  For the Successor Company, the components of AOCI included in the accompanying condensed consolidated balance sheets consist only of net unrealized gains (losses) from investments in Jinhui stock and KLC stock based on the revised cost basis recorded as part of fresh-start reporting.
 
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Changes in AOCI by Component
For the Three-Month Period Ended March 31, 2015
Successor Company

 	 	Net Unrealized
Gain (Loss)
on
Investments	 	
AOCI — January 1, 2015	 	$	(25,317	)	
 	 	 	 	
OCI before reclassifications	 	2,359	 	
Amounts reclassified from AOCI	 	—	 	
Net current-period OCI	 	2,359	 	
 	 	 	 	
AOCI — March 31, 2015	 	$	(22,958	)	
 
Changes in AOCI by Component
For the Three-Month Period Ended March 31, 2014
Predecessor Company

 	 	Net Unrealized
Gain (Loss) on
Cash Flow
Hedges	 	Net Unrealized
Gain
on
Investments	 	Total	 	
AOCI — January 1, 2014	 	$	(6,976	)	$	60,698	 	$	53,722	 	
 	 	 	 	 	 	 	 	
OCI before reclassifications	 	2,635	 	(14,215	)	(11,580	)	
Amounts reclassified from AOCI	 	(1,407	)	—	 	(1,407	)	
Net current-period OCI	 	1,228	 	(14,215	)	(12,987	)	
 	 	 	 	 	 	 	 	
AOCI — March 31, 2014	 	$	(5,748	)	$	46,483	 	$	40,735	 	
 
Reclassifications Out of AOCI
For the Three -Month Periods Ended March 31, 2015 and 2014

 	 	Amount Reclassified from AOCI	 	 	 	
 	 	Successor	 	Predecessor	 	 	 	
Details about AOCI Components	 	Three Months
Ended
March 31,
2015	 	Three Months
Ended
March 31,
2014	 	Net Loss is Presented	 	
Gains and losses on cash flow hedges	 	 	 	 	 	 	 	
Interest rate contracts	 	$	—	 	$	1,407	 	Interest expense	 	
 	 	 	 	 	 	 	 	
Total reclassifications for the period	 	$	—	 	$	1,407	 	 	 	
 
13 - FAIR VALUE OF FINANCIAL INSTRUMENTS
 
The fair values and carrying values of the Company’s financial instruments at March 31, 2015 and December 31, 2014 which are required to be disclosed at fair value, but not recorded at fair value, are noted below.

 	 	Successor	 	
 	 	March 31, 2015	 	December 31, 2014	 	
 	 	Carrying
Value	 	Fair Value	 	Carrying
Value	 	Fair Value	 	
Cash and cash equivalents	 	$	68,783	 	$	68,783	 	$	83,414	 	$	83,414	 	
Restricted cash	 	10,050	 	10,050	 	29,695	 	29,695	 	
Floating rate debt	 	434,608	 	434,608	 	430,135	 	430,135	 	

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The fair value of the floating rate debt under the Amended and Restated $100 Million Term Loan Facility and the Amended and Restated $253 Million Term Loan Facility are based on rates obtained upon our emergence from Chapter 11 on the Effective Date.  The 2010 Baltic Trading Credit Facility was refinanced by the Baltic Trading $148 Million Credit Facility, which was entered into December 31, 2014.  On January 7, 2015, Baltic Trading settled the outstanding debt under the 2010 Baltic Trading Credit Facility with proceeds from the Baltic Trading $148 Million Credit Facility, therefore Management believes the floating rate debt outstanding under the Baltic Trading $148 Million Credit Facility and the 2010 Baltic Trading Credit Facility as of March 31, 2015 and December 31, 2014, respectively, approximates its fair value as of those dates. The fair value of the Baltic Trading $22 Million Term Loan Facility and the Baltic Trading $44 Million Term Loan Facility is based on rates that Baltic Trading recently obtained upon the effective dates of these facilities on August 30, 2013 and December 3, 2013, respectively.  Lastly, the fair value of the floating rate debt outstanding under the 2014 Baltic Trading Term Loan Facilities is based on rates that Baltic Trading recently obtained upon the effective date of these facilities on October 8, 2014. Refer to Note 9 — Debt for further information.  Additionally, the Company considers its creditworthiness in determining the fair value of floating rate debt under the credit facilities.  The carrying value approximates the fair market value for these floating rate loans.  The carrying amounts of the Company’s other financial instruments at March 31, 2015 and December 31, 2014 (principally Due from charterers and Accounts payable and accrued expenses), approximate fair values because of the relatively short maturity of these instruments.
 
ASC Subtopic 820-10, “Fair Value Measurements & Disclosures” (“ASC 820-10”), applies to all assets and liabilities that are being measured and reported on a fair value basis.  This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumption (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
 
·                   Level 1—Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.
 
·                   Level 2—Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
 
·                   Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
 
As of March 31, 2015 and December 31, 2014, the fair values of the Company’s financial assets and liabilities are categorized as follows:

 	 	Successor	 	
 	 	March 31, 2015	 	
 	 	Total	 	Quoted
Market
Prices in
Active
Markets
(Level 1)	 	
Investments	 	$	28,845	 	$	28,845	 	

 	 	Successor	 	
 	 	December 31, 2014	 	
 	 	Total	 	Quoted
Market
Prices in
Active
Markets
(Level 1)	 	
Investments	 	$	26,486	 	$	26,486	 	

The Company holds an investment in the capital stock of Jinhui , which is classified as a long-term investment.  The stock of Jinhui is publicly traded on the Oslo Stock Exchange and is considered a Level 1 item.  The Company also holds an investment in the stock of KLC, which is classified as a long-term investment.  The stock of KLC is publicly traded on the Korea Stock Exchange and is considered a Level 1 item.  Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. Floating rate debt is considered to be a Level 2 item as the Company considers the estimate of rates it could
 
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obtain for similar debt or based upon transaction amongst third parties. The Company did not have any Level 3 financial assets or liabilities as of March 31, 2015 and December 31, 2014.
 
14 - PREPAID EXPENSES AND OTHER CURRENT AND NONCURRENT ASSETS
 
Prepaid expenses and other current assets consist of the following:

 	 	Successor	 	Successor	 	
 	 	March 31,
2015	 	December 31,
2014	 	
Lubricant inventory, fuel oil and diesel oil inventory and other stores	 	$	11,712	 	$	11,018	 	
Prepaid items	 	5,565	 	4,638	 	
Insurance receivable	 	2,774	 	1,951	 	
Other	 	5,869	 	4,816	 	
Total prepaid expenses and other current assets	 	$	25,920	 	$	22,423	 	
 
Other noncurrent assets in the amount of $514 at March 31, 2015 and December 31, 2014 represent the security deposit related to the operating lease entered into effective April 4, 2011. Refer to Note 20 — Commitments and Contingencies for further information related to the lease agreement.
 
15 — DEFERRED FINANCING COSTS
 
Deferred financing costs include fees, commissions and legal expenses associated with securing loan facilities and other debt offerings and amending existing loan facilities. These costs are amortized over the life of the related debt and are included in interest expense.  Refer to Note 9 — Debt for further information regarding the existing loan facilities.
 
Total net deferred financing costs consist of the following as of March 31, 2015 and December 31, 2014:

 	 	Successor	 	Successor	 	
 	 	March 31,
2015	 	December
31, 2014	 	
 	 	 	 	 	 	
$100 Million Term Loan Facility	 	$	1,492	 	$	1,492	 	
$253 Million Term Loan Facility	 	3,135	 	3,135	 	
2015 Revolving Credit Facility	 	26	 	—	 	
Baltic Trading $148 Million Credit Facility	 	3,456	 	3,233	 	
Baltic Trading $22 Million Term Loan Facility	 	544	 	529	 	
Baltic Trading $44 Million Term Loan Facility	 	758	 	758	 	
2014 Baltic Trading Term Loan Facilities	 	1,866	 	1,853	 	
Total deferred financing costs	 	11,277	 	11,000	 	
Less: accumulated amortization	 	1,216	 	729	 	
Total	 	$	10,061	 	$	10,271	 	
 
Amortization expense for deferred financing costs for the Successor Company and the Predecessor Company for the three months ended March 31, 2015 and 2014 was $487 and $2,220, respectively.  This amortization expense is recorded as a component of Interest expense in the Condensed Consolidated Statements of Operations.
 
Baltic Trading entered into the Baltic Trading $148 Million Credit Facility on December 31, 2014, which was used to refinance the outstanding indebtedness under the 2010 Baltic Trading Credit Facility.  As such, on December 31, 2014, the net unamortized deferred financing costs associated with the 2010 Baltic Trading Credit Facility are being amortized over the life of the Baltic Trading $148 Million Credit Facility.  (Refer to Note 9 — Debt)
 
16 - FIXED ASSETS
 
Fixed assets consist of the following:

 	 	Successor	 	Successor	 	
 	 	March 31,
2015	 	December 31,
2014	 	
Fixed assets, at cost:	 	 	 	 	 	
Vessel equipment	 	$	349	 	$	229	 	
Furniture and fixtures	 	462	 	462	 	
Computer equipment	 	142	 	129	 	
Total costs	 	953	 	820	 	
Less: accumulated depreciation and amortization	 	170	 	119	 	
Total	 	$	783	 	$	701	 	
 
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Table of Contents
 
Depreciation and amortization expense for fixed assets for the Successor Company and the Predecessor Company for the three months ended March 31, 2015 and 2014 was $51 and $219, respectively.  Refer to Note 4 — Cash Flow Information for information regarding the reclassification from fixed assets to vessels assets during the three months ended March 31, 2014.
 
17 — ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
Accounts payable and accrued expenses consist of the following:

 	 	Successor	 	Successor	 	
 	 	March 31,
2015	 	December 31,
2014	 	
Accounts payable	 	$	8,885	 	$	9,921	 	
Accrued general and administrative expenses	 	7,849	 	5,894	 	
Accrued vessel operating expenses	 	13,083	 	12,402	 	
Total	 	$	29,817	 	$	28,217	 	
 
18 — REVENUE FROM TIME CHARTERS
 
Total voyage revenue earned on time charters, including revenue earned in vessel pools and spot market-related time charters, as well as the sale of bunkers consumed during short-term time charters, for the three months ended March 31, 2015 and 2014 for the Successor Company and the Predecessor Company was $33,609 and $63,180, respectively.  There was no profit sharing revenue earned during the three months ended March 31, 2015 and 2014.  Future minimum time charter revenue, based on vessels committed to noncancelable time charter contracts as of April 27, 2015, is expected to be $4,491 for the remainder of 2015, assuming off-hire due to any scheduled drydocking and that no additional off-hire time is incurred.  For drydockings, the Company assumes twenty days of offhire.  Future minimum revenue excludes revenue earned for the vessels currently in pool arrangements and vessels that are currently on or will be on spot market-related time charters, as spot rates cannot be estimated, as well as profit sharing revenue.
 
19 — REORGANIZATION ITEMS, NET
 
Reorganization items, net represent amounts incurred and recovered subsequent to the bankruptcy filing as a direct result of the filing of the Chapter 11 Cases and are comprised of the following:

 	 	Successor	 	
 	 	Three Months
Ended
March 31,
2015	 	
Professional fees incurred	 	$	278	 	
Trustee fees incurred	 	242	 	
Total reorganization fees	 	$	520	 	
 	 	 	 	
Gain on settlement of liabilities subject to compromise	 	$	—	 	
Net gain on debt and equity discharge and issuance	 	—	 	
Fresh-start reporting adjustments	 	—	 	
Total fresh-start adjustment	 	$	—	 	
 	 	 	 	
Total reorganization items, net	 	$	520	 	
 
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20 — COMMITMENTS AND CONTINGENCIES
 
In September 2005, the Company entered into a 15-year lease for office space in New York, New York for which there was a free rental period from September 1, 2005 to July 31, 2006.  On January 6, 2012, the Company ceased the use of this space.  During the three months ended March 31, 2014, the Predecessor Company recorded net rent expense of $0 related to this lease agreement.  Pursuant to the Plan that was approved by the Bankruptcy Court, the Debtors rejected the lease agreement on the Effective Date and the Company believes that it will owe the lessor the remaining liability.
 
Effective April 4, 2011, the Company entered into a seven-year sub-sublease agreement for additional office space in New York, New York.  The term of the sub-sublease commenced June 1, 2011, with a free base rental period until October 31, 2011. Following the expiration of the free base rental period, the monthly base rental payments are $82 per month until May 31, 2015 and thereafter will be $90 per month until the end of the seven-year term.  Pursuant to the sub-sublease agreement, the sublessor was obligated to contribute $472 toward the cost of the Company’s alterations to the sub-subleased office space.  The Company has also entered into a direct lease with the over-landlord of such office space that will commence immediately upon the expiration of such sub-sublease agreement, for a term covering the period from May 1, 2018 to September 30, 2025; the direct lease provides for a free base rental period from May 1, 2018 to September 30, 2018.  Following the expiration of the free base rental period, the monthly base rental payments will be $186 per month from October 1, 2018 to April 30, 2023 and $204 per month from May 1, 2023 to September 30, 2025.  For accounting purposes, the sub-sublease agreement and direct lease agreement with the landlord constitutes one lease agreement.  As a result of the straight-line rent calculation generated by the free rent period and the tenant work credit, the monthly straight-line rental expense for the term of the entire lease from June 1, 2011 to September 30, 2025 was $130 for the Predecessor Company.  On the Effective Date, a revised straight-line rent calculation was completed as part of fresh-start reporting.  The revised monthly straight-line rental expense for the remaining term of the lease from the Effective Date to September 30, 2025 is $150.  The Company had a long-term lease obligation at March 31, 2015 and December 31, 2014 of $593 and $390, respectively.  Rent expense pertaining to this lease recorded by the Successor Company and the Predecessor Company for the three months ended March 31, 2015 and 2014 was $452 and $389, respectively.
 
Future minimum rental payments on the above lease for the next five years and thereafter are as follows: $791 for the remainder of 2015, $1,076 annually for 2016 and 2017, $916 for 2018, $2,230 for 2019 and a total of $13,360 for the remaining term of the lease.
 
21 — STOCK-BASED COMPENSATION
 
Genco Shipping & Trading — Predecessor Company
 
Under the Plan that was approved by the Bankruptcy Court, on the Effective Date, the 880,465 unvested shares that were issued under the Genco Shipping & Trading Limited 2005 and 2012 Equity Incentive Plans (the “GS&T Plans”) were deemed vested automatically and equity warrants were issued.
 
There were no shares that vested under the GS&T Plans during the three months ended March 31, 2014 for the Predecessor Company.
 
For the three months ended March 31, 2014 the Predecessor Company recognized nonvested stock amortization expense for the GS&T Plans, which is included in General, administrative and management fees, as follows:

 	 	Predecessor	 	
 	 	Three Months
Ended
March 31,
2014	 	
General, administrative and management fees	 	$	427	 	

Genco Shipping & Trading — Successor Company
 
2014 Management Incentive Plan
 
On the Effective Date, pursuant to the Chapter 11 Plan, the Company adopted the Genco Shipping & Trading Limited 2014 Management Incentive Plan (the “MIP”). An aggregate of 9,668,061 shares of Common Stock were available for award under the
 
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MIP, which were awarded in the form of restricted stock grants and awards of three tiers of MIP Warrants with staggered strike prices based on increasing equity values.  The number of shares of common stock available under the Plan represented approximately 1.8% of the shares of post-emergence Common Stock outstanding as of the Effective Date on a fully-diluted basis. Awards under the MIP were available to eligible employees, non-employee directors and/or officers of the Company and its subsidiaries (collectively, “Eligible Individuals”). Under the MIP, a committee appointed by the Board from time to time (or, in the absence of such a committee, the Board) (in either case, the “Plan Committee”) may grant a variety of stock-based incentive awards, as the Plan Committee deems appropriate, to Eligible Individuals. The MIP Warrants are exercisable on a cashless basis and contain customary anti-dilution protection in the event of any stock split, reverse stock split, stock dividend, reclassification, dividend or other distributions (including, but not limited to, cash dividends), or business combination transaction.
 
On August 7, 2014, pursuant to the MIP, certain individuals were granted MIP Warrants whereby each warrant can be converted on a cashless basis for the amount in excess of the respective strike price. The MIP Warrants were issued in three tranches, which are exercisable for 2,380,664, 2,467,009, and 3,709,788 shares and have exercise prices of $25.91 (the “$25.91 Warrants”), $28.73 (the “$28.73 Warrants”) and $34.19 (the “$34.19 Warrants”), respectively. The fair value of each warrant upon emergence from bankruptcy was $7.22 for the $25.91 Warrants, $6.63 for the $28.73 Warrants and $5.63 for the $34.19 Warrants. The warrant values were based upon a calculation using the Black-Scholes-Merton option pricing formula. This model uses inputs such as the underlying price of the shares issued when the warrant is exercised, volatility, cost of capital interest rate and expected life of the instrument. The Company has determined that the warrants should be classified within Level 3 of the fair value hierarchy by evaluating each input for the Black-Scholes-Merton option pricing formula against the fair value hierarchy criteria and using the lowest level of input as the basis for the fair value classification. The Black-Scholes-Merton option pricing formula used a volatility of 43.91% (representing the six-year volatility of a peer group), a risk-free interest rate of 1.85% and a dividend rate of 0%.  The aggregate fair value of these awards upon emergence from bankruptcy was $54,436. The warrants vest 33.33% on each of the first three anniversaries of the grant date, with accelerated vesting upon a change in control of the Company.
 
For the three months ended March 31, 2015, the Successor Company recognized amortization expense of the fair value of these warrants of $8,199, which is included in the Company’s Condensed Consolidated Statements of Operations as a component of General, administrative and management fees. Amortization of the unamortized stock-based compensation balance of $32,847 as of March 31, 2015 is expected to be expensed $17,742, $11,496, and $3,609 during the remainder of 2015 and during the years ending December 31, 2016 and 2017, respectively.  The following table summarizes all the warrant activity for the three months ended March 31, 2015:

 	 	Number of
Warrants	 	Weighted
Average Exercise
Price	 	Weighted
Average Fair
Value	 	
Outstanding at January 1, 2015 - Successor	 	8,557,461	 	$	30.31	 	$	6.36	 	
Granted	 	—	 	—	 	—	 	
Exercised	 	—	 	—	 	—	 	
Forfeited	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	
Outstanding at March 31, 2015 - Successor	 	8,557,461	 	$	30.31	 	$	6.36	 	
 
The following table summarizes certain information about the warrants outstanding as of March 31, 2015:

 	 	Warrants Outstanding,
March 31, 2015	 	Warrants Exercisable,
March 31, 2015	 	
 	 	 	 	 	 	Weighted	 	 	 	 	 	
 	 	 	 	Weighted	 	Average	 	 	 	Weighted	 	
Weighted
Average
Exercise Price	 	Number of
Warrants	 	Average
Exercise
Price	 	Remaining
Contractual
Life	 	Number of
Warrants	 	Average
Exercise
Price	 	
$	 30.31	 	8,557,461	 	$	30.31	 	5.36	 	—	 	—	 	

On August 6, 2014, the Successor Company’s Board of Directors approved the 2014 Equity Incentive Plan for an aggregate of 250,000,000, which included the shares issued for the Successor Company pursuant to the Plan.  The nonvested stock awards granted under the 2014 MIP Plan will vest ratably on each of the three anniversaries of the determined vesting date of August 7, 2014.  The table below summarizes the Successor Company’s nonvested stock awards for the three months ended March 31, 2015 which were issued under the 2014 MIP Plan:
 
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 	 	Number of
Shares	 	Weighted
Average Grant
Date Price	 	
Outstanding at January 1, 2015 - Successor	 	1,110,600	 	$	20.00	 	
Granted	 	—	 	—	 	
Vested	 	—	 	—	 	
Forfeited	 	—	 	—	 	
 	 	 	 	 	 	
Outstanding at March 31, 2015 - Successor	 	1,110,600	 	$	20.00	 	
 
There were no shares that vested under the 2014 MIP Plan during the three months ended March 31, 2015 for the Successor Company.  The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.
 
For the three months ended March 31, 2015, the Successor Company recognized nonvested stock amortization expense for the 2014 MIP Plan restricted shares, which is included in General, administrative and management fees, as follows:

 	 	Successor	 	
 	 	Three Months
Ended
March 31,
2015	 	
General, administrative and management fees	 	$	3,345	 	

The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures.  As of March 31, 2015, unrecognized compensation cost of $13,403 related to nonvested stock will be recognized over a weighted-average period of 2.36 years.
 
Baltic Trading Limited
 
On March 13, 2014, Baltic Trading’s Board of Directors approved an amendment to the Baltic Trading Limited 2010 Equity Incentive Plan (the “Baltic Trading Plan”) that increased the aggregate number of shares of common stock available for awards from 2,000,000 to 6,000,000 shares.  Additionally, on April 9, 2014, at Baltic Trading’s 2014 Annual Meeting of Shareholders, Baltic Trading’s shareholders approved the amendment to the Baltic Trading Plan.
 
The following table presents a summary of Baltic Trading’s nonvested stock awards for the three months ended March 31, 2015 under the Baltic Trading Plan:

 	 	Number of Baltic
Trading
Common
Shares	 	Weighted
Average Grant
Date Price	 	
Outstanding at January 1, 2015	 	1,941,844	 	$	3.80	 	
Granted	 	—	 	—	 	
Vested	 	—	 	—	 	
Forfeited	 	—	 	—	 	
 	 	 	 	 	 	
Outstanding at March 31, 2015	 	1,941,844	 	$	3.80	 	
 
The total fair value of shares that vested under the Baltic Trading Plan during the three months ended March 31, 2015 and 2014 was $0 and $774, respectively.  The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.
 
For the three months ended March 31, 2015 and 2014, the Successor Company and the Predecessor Company recognized nonvested stock amortization expense for the Baltic Trading Plan, which is included in General, administrative and management fees, as follows:

 	 	Successor	 	Predecessor	 	
 	 	Three Months
Ended
March 31,
2015	 	Three Months
Ended
March 31,
2014	 	
General, administrative and management fees	 	$	816	 	$	963	 	

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The Company is amortizing Baltic Trading’s grants over the applicable vesting periods, net of anticipated forfeitures.  As of March 31, 2015, unrecognized compensation cost of $4,457 related to nonvested stock will be recognized over a weighted-average period of 3.03 years.
 
22 - LEGAL PROCEEDINGS
 
Refer to Note 1 — General Information for information concerning the Chapter 11 Cases.
 
On March 28, 2014, the Genco Auvergne was arrested due to a disputed claim with the charterer of one of the Company’s other vessels, namely the Genco Ardennes. In order for the Company to release the Genco Auvergne from its arrest, the Company entered into a cash collateralized $900 bank guarantee with Skandinaviska Enskilda Banken AB (the “SEB Bank Guarantee”) on April 3, 2014. The vessel has since been released from its arrest and the bank guarantee will remain in an escrow account until the arbitration related to this case is completed. The SEB Bank Guarantee resulted in additional indebtedness by the Company. As the Company was in default under the covenants of its 2007 Credit Facility due to the default on a scheduled debt amortization payment due on March 31, 2014, on April 3, 2014 the Company received a consent from the lenders under the 2007 Credit Facility to incur this additional indebtedness. Also, under the $253 Million Term Loan Facility for which the Genco Auvergne is collateralized, the Company may not incur additional indebtedness related to its collateralized vessels under this facility. The Company also received a consent from the lenders under the $253 Million Term Loan Facility on April 3, 2014 in order to enter the SEB Bank Guarantee.
 
In April 2015, six class action complaints were filed in the Supreme Court of the State of New York, County of New York, styled Erol Sarikaya v. Peter C. Georgiopoulos et al. , Index No. 651244/2015, filed on April 15, 2015, voluntarily dismissed, and refiled as Joshua Bourne v. Peter C. Georgiopoulos et al. , Index No. 651429/2015, filed on April 28, 2015, Justin Wilson v. Baltic Trading Ltd., et al. , Index No. 651241/2015, filed on April 15, 2015, Sangeetha Ganesan v. Baltic Trading Limited et al. , Index No. 651279/2015, filed on April 17, 2015,  Edward Braunstein v. Peter C. Georgiopoulos et al. , Index No. 651368/2015, filed on April 23, 2015, Larry Williams v. Baltic Trading Ltd., et al. , Index No. 651371/2015, filed on April 23, 2015, and Larry Goldstein and Bernhard Stomporowski v. John C. Wobensmith et al.,  Index No. 651407/2015, filed on April 27, 2015. All six complaints purport to be brought by and on behalf of the Baltic Trading’s shareholders. The plaintiff in each action alleges the proposed merger does not fairly compensate Baltic Trading’s shareholders and undervalues Baltic Trading. Each lawsuit names as defendants some or all of the Company, Baltic Trading, the individual members of Baltic Trading’s board, the Company’s and Baltic Trading’s President, and the Company’s merger subsidiary. The claims generally allege (i) breaches of fiduciary duties of good faith, due care, disclosure to shareholders, and loyalty, including for failing to maximize shareholder value, and (ii) aiding and abetting those breaches. Among other relief, the complaints seek an injunction against the merger, declaratory judgments that the individual defendants breached fiduciary duties, rescission of the merger agreement, and unspecified damages.  The Company does not believe that it is probable that the resolution of these matters will have a material financial reporting consequence.
 
From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.  The Company is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material effect on the Company, its financial condition, results of operations or cash flows besides those noted above.
 
23 - SUBSEQUENT EVENTS
 
On April 7, 2015, the Company entered into a definitive merger agreement with Baltic Trading under which the Company will acquire Baltic Trading in a stock-for-stock transaction.  Refer to Note 1 — General information for further information regarding this agreement.
 
Additionally, on April 7, 2015, t he Company entered into an agreement under which it acquired the Baltic Lion and Baltic Tiger entities from Baltic Trading.  This purchase agreement closed on April 8, 2015.  Refer to Note 1 — General information for further information regarding this agreement.
 
Lastly, on April 7, 2015, certain of the Company’s wholly-owned subsidiaries entered in the 2015 Revolving Credit Facility to be used for general corporate purposes.  On April 8, 2015, the Company drew down $25,000 on the 2015 Revolving Credit Facility.  Refer to Note 9 — Debt for additional information.
 
On April 30, 2015, the Company entered into agreements to amend or waive certain provisions of the $100 Million Term Loan Facility and the $253 Million Term Loan Facility.  Refer to Note 9 — Debt for additional information.
 
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ITEM 2 .                         MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 
This report contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance.  These forward-looking statements are based on management’s current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) declines in demand or rates in the drybulk shipping industry; (ii) prolonged weakness in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, repairs, maintenance and general, administrative and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the our vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) our acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to time charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the fulfillment of the closing conditions under, or the execution of additional documentation for, Baltic Trading’s agreements to acquire vessels; (xvi) obtaining, completion of definitive documentation for, and funding of financing for the vessel acquisitions on acceptable terms; (xvii) the extent to which our operating results continue to be affected by weakness in market conditions and charter rates; (xviii) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; (xix) the timing and realization of the recoveries of assets and the payments of claims and the amount of expenses required to recognize such recoveries and reconcile such claims; (xx) our ability to obtain sufficient and acceptable post-restructuring financing; and other factors listed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2014, as amended, and subsequent reports on Form 8-K and Form 10-Q .
 
The following management’s discussion and analysis should be read in conjunction with our historical consolidated financial statements and the related notes included in this Form 10-Q.
 
General
 
We are a Marshall Islands company that transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk carrier vessels.  Excluding vessels of Baltic Trading Limited (“Baltic Trading”), our fleet currently consists of eleven Capesize, eight Panamax, 17 Supramax, six Handymax and 13 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 4,168,000 dwt, and the average age of our fleet is currently approximately 9.8 years, as compared to the average age for the world fleet of approximately 9 years for the drybulk shipping segments in which we compete.  We seek to deploy our vessels on time charters, spot market-related time charters or in vessel pools trading in the spot market, to reputable charterers, including Cargill International S.A., Pacific Basin Chartering Ltd., Swissmarine Services S.A. and the Clipper Logger Pool, in which Clipper Group acts as the pool manager.  The majority of the vessels in our current fleet are presently engaged under time charter, spot market-related time charter and vessel pool contracts that expire (assuming the option periods in the time charters are not exercised) between May 2015 and March 2016.
 
In addition, Baltic Trading’s fleet currently consists of two Capesize, two Ultramax, four Supramax and five Handysize drybulk carriers with an aggregate carrying capacity of approximately 863,000 dwt.  After the expected delivery of the two additional Ultramax newbuilding vessels that Baltic Trading has agreed to acquire, Baltic Trading will own a fleet of 15 drybulk vessels, consisting of two Capesize, four Ultramax, four Supramax and five Handysize drybulk carriers with a total carrying capacity of approximately 991,000 dwt.
 
See pages 37 - 41 for a table of all vessels that have been or are expected to be delivered to us, including Baltic Trading’s vessels.
 
On April 21, 2014, we filed the Chapter 11 Filing. On July 2, 2014, the Bankruptcy Court entered the Confirmation Order which approved and confirmed the Plan. On the Effective Date of July 9, 2014, we emerged from Chapter 11 through a series of transactions contemplated by the Plan, and the Plan became effective pursuant to its terms. Refer to the Annual Report on Form 10-K for the year ended December 31, 2014, as amended, for a detailed description of the Plan.
 
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Baltic Trading, formerly our wholly-owned subsidiary, completed its initial public offering, or IPO, on March 15, 2010.  As of March 31, 2015, our wholly-owned subsidiary Genco Investments LLC owned 6,356,471 shares of Baltic Trading’s Class B Stock, which represents a 10.85% ownership interest in Baltic Trading at March 31, 2015 and 64.60% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock. Baltic Trading is consolidated as we control a majority of the voting interest in Baltic Trading. Management’s discussion and analysis of our results of operations and financial condition includes the results of Baltic Trading.
 
On April 7, 2015, we entered into a definitive merger agreement with Baltic Trading under which we agreed to acquire Baltic Trading in a stock-for-stock transaction.  Under the terms of the agreement, Baltic Trading will become our indirect wholly-owned subsidiary, and Baltic Trading shareholders (other than GS&T and its subsidiaries) will receive 0.216 shares of our common stock for each share of Baltic Trading’s common stock they own at closing, with fractional shares to be settled in cash.  Upon consummation of the transaction, our shareholders are expected to own approximately 84.5% of the combined company, and Baltic Trading’s shareholders (other than the GS&T and its subsidiaries) are expected to own approximately 15.5% of the combined company.  Shares of Baltic Trading’s Class B stock (all of which are owned by us) will be canceled in the merger.  We expect to have our stock listed on the New York Stock Exchange upon consummation of the transaction.
 
Our Board of Directors and Baltic Trading’s Board of Directors established independent special committees to review the transaction and negotiate the terms on behalf of their respective companies.  Both independent special committees unanimously approved the transaction.  The Boards of Directors of both companies approved the merger by unanimous vote of directors present and voting, with Peter C. Georgiopoulos, Chairman of the Board of each company, recused for the vote.  Approval of the merger is subject to a vote of both our shareholders and Baltic Trading’s shareholders.
 
Additionally, on April 7, 2015, we entered into an agreement under which we acquired all of the shares of two single-purpose entities that were wholly owned by Baltic Trading, each of which owns one Capesize drybulk vessel, for an aggregate purchase price of $68.5 million, subject to reduction for $40.6 million of outstanding first-mortgage debt of such single-purpose entities that is to be guaranteed by the Company and an adjustment for the difference between such single-purpose entities’ current assets and total liabilities as of the closing date.  At March 31, 2015, the Company determined that the sale of the Baltic Lion and Baltic Tiger were more likely than not based on Baltic Trading’s expressed consideration to divest of those vessels to increase its liquidity position and strengthen its balance sheet.  Through the transactions, which closed on April 8, 2015, we acquired the vessels known as the Baltic Lion and the Baltic Tiger. The independent special committees of both companies’ Boards of Directors reviewed and approved this transaction.
 
We entered into a long-term management agreement (the “Management Agreement”) with Baltic Trading pursuant to which we apply our expertise and experience in the drybulk industry to provide Baltic Trading with commercial, technical, administrative and strategic services. The Management Agreement is for an initial term of approximately 15 years and will automatically renew for additional five-year periods unless terminated in accordance with its terms. Baltic Trading will pay us for the services we provide it as well as reimburse us for our costs and expenses incurred in providing certain of these services. Management fee income we earn from the Management Agreement net of any allocated shared expenses, such as salary, office expenses and other general and administrative fees, will be taxable to us. Upon consolidation with Baltic Trading, any management fee income earned will be eliminated for financial reporting purposes. Baltic Trading has the right to terminate the Management Agreement upon the occurrence of certain events, including a Manager Change of Control (as defined in the Management Agreement), without making a termination payment.
Some of these have occurred as a result of the transactions contemplated by the Plan, including the consummation of any transaction that results in (i) any “person” (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934), other than Peter
Georgiopoulos or any of his affiliates, becoming the beneficial owner of 25% of the Company’s voting securities or (ii) the Company’s stock ceasing to be traded on the New York Stock Exchange or any other internationally recognized stock exchange.  Therefore, Baltic Trading may have the right to terminate the Management Agreement, although Baltic Trading may be prevented or delayed from doing so because of the effect of applicable bankruptcy law, including the automatic stay provisions of the United States Bankruptcy Code and the provisions of the Prepack Plan and the Confirmation Order.
 
On April 7, 2015, five of our wholly-owned subsidiaries, Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited (collectively, the “Subsidiaries”) entered into a loan agreement by and among the Subsidiaries, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent, security agent, and as lender, providing for a $59.5 million revolving credit facility, with an uncommitted accordion feature that, if exercised, will upsize the facility up to $150.0 million (the “2015 Revolving Credit Facility”).  On April 7, 2015, we entered into a guarantee of the obligations of the Subsidiaries under the 2015 Revolving Credit Facility, in favor of ABN AMRO Capital USA LLC.  Borrowings under the 2015 Revolving Credit Facility are to be secured by liens on each of the Subsidiaries’ respective vessels; specifically, the Genco Commodus, Genco Maximus, Genco Claudius, Genco Hunter and Genco Warrior and other related assets.  Should the accordion feature be exercised, the 2015 Revolving Credit Facility will also be secured by up to six additional Capesize vessels and two additional Supramax vessels owned by other subsidiaries of the Company and other related assets.
 
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Borrowings under the 2015 Revolving Credit Facility have been used for general corporate purposes including “working capital” (as defined in the 2015 Revolving Credit Facility) and to finance the purchase of drybulk vessels.  The 2015 Revolving Credit Facility has a maturity date of March 31, 2020.  Borrowings under the 2015 Revolving Credit Facility bear interest at LIBOR plus a margin based on a combination of utilization levels under the 2015 Revolving Credit Facility and a security maintenance cover ranging from 3.40% per annum to 4.25% per annum.  The commitment under the 2015 Revolving Credit Facility is subject to quarterly reductions of $1,641 to $4,137 depending on the total amount committed.  Borrowings under the 2015 Revolving Credit Facility are subject to 20 equal consecutive quarterly installment repayments commencing three months after the date of the loan agreement, or July 7, 2015.  On April 8, 2015, we drew down $25.0 million on the 2015 Revolving Credit Facility for working capital purposes and to partially fund the purchase of the Baltic Lion and Baltic Tiger from Baltic Trading.
 
On November 13, 2013, Baltic Trading entered into agreements to purchase up to four 64,000 dwt Ultramax newbuilding drybulk carriers from Yangfan Group Co., Ltd. for a purchase of $28.0 million per vessel, or up to $112.0 million in the aggregate. Baltic Trading has agreed to purchase two such vessels, to be renamed the Baltic Hornet and Baltic Wasp, and obtained an option to purchase up to two additional such vessels for the same purchase price, which Baltic Trading exercised on January 8, 2014. These vessels are to be renamed the Baltic Mantis and the Baltic Scorpion. The purchases are subject to completion of customary additional documentation and closing conditions. The first of these vessels, the Baltic Hornet, was delivered to Baltic Trading on October 29, 2014.  The Baltic Wasp was delivered to Baltic Trading on January 2, 2015. The Baltic Scorpion and the Baltic Mantis are expected to be delivered to Baltic Trading during the second and third quarters of 2015, respectively. Baltic Trading intends to use a combination of cash on hand, future cash flow from operations as well as debt or equity financing, including the Baltic Trading $148 Million Credit Facility as described in Note 9 — Debt in our Condensed Consolidated Financial Statements, to fully finance the acquisition of the remaining two Ultramax newbuilding drybulk vessels.  If Baltic Trading is unable to obtain such debt or equity financing to fund the vessels, it may pursue alternatives, including refinancing its existing indebtedness or disposition of assets.
 
Our management team and our other employees are responsible for the commercial and strategic management of our fleet. Commercial management includes the negotiation of charters for vessels, managing the mix of various types of charters, such as time charters, voyage charters and spot market-related time charters, and monitoring the performance of our vessels under their charters. Strategic management includes locating, purchasing, financing and selling vessels. We currently contract with three independent technical managers to provide technical management of our fleet at a lower cost than we believe would be possible in-house. Technical management involves the day-to-day management of vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies. Members of our New York City-based management team oversee the activities of our independent technical managers.
 
We hold an investment in the capital stock of Jinhui Shipping and Transportation Limited (“Jinhui”) and Korea Line Corporation (“KLC”). Jinhui is a drybulk shipping owner and operator focused on the Supramax segment of drybulk shipping. KLC is a marine transportation service company which operates a fleet of carriers which includes carriers for iron ore, liquefied natural gas and tankers for oil and petroleum products.
 
We provide technical services for drybulk vessels purchased by Maritime Equity Partners LLC (“MEP”) under an agency agreement between us and MEP.  These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services are provided for a fee of $750 per ship per day plus reimbursement of out-of-pocket costs and will be provided for an initial term of one year.  MEP has the right to cancel provision of services on 60 days’ notice with payment of a one-year termination fee upon a change of our control.  We may terminate provision of the services at any time on 60 days’ notice.  Peter C. Georgiopoulos, our Chairman of the Board of Directors, controls and has a minority interest in MEP.  This arrangement was approved by an independent committee of our Board of Directors.
 
Factors Affecting Our Results of Operations
 
We believe that the following table reflects important measures for analyzing trends in our results of operations. The table reflects our ownership days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the three months ended March 31, 2015 and 2014 for the Successor Company and the Predecessor Company, respectively, on a consolidated basis, which includes the operations of Baltic Trading.
 
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 	 	For the Three Months Ended 
 March 31,	 	 	 	 	 	
 	 	Successor	 	Predecessor	 	Increase	 	 	 	
 	 	2015	 	2014	 	(Decrease)	 	% Change	 	
Fleet Data:	 	 	 	 	 	 	 	 	 	
Ownership days (1)	 	 	 	 	 	 	 	 	 	
Capesize	 	1,170.0	 	1,170.0	 	—	 	—	 	
Panamax	 	720.0	 	720.0	 	—	 	—	 	
Ultramax	 	178.9	 	—	 	178.9	 	100.0	%	
Supramax	 	1,890.0	 	1,890.0	 	—	 	—	 	
Handymax	 	540.0	 	540.0	 	—	 	—	 	
Handysize	 	1,620.0	 	1,620.0	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Total	 	6,118.9	 	5,940.0	 	178.9	 	3.0	%	
 	 	 	 	 	 	 	 	 	 	
Available days (2)	 	 	 	 	 	 	 	 	 	
Capesize	 	1,146.0	 	1,170.0	 	(24.0	)	(2.1	)%	
Panamax	 	708.1	 	679.4	 	28.7	 	4.2	%	
Ultramax	 	174.5	 	—	 	174.5	 	100.0	%	
Supramax	 	1,762.4	 	1,796.8	 	(34.4	)	(1.9	)%	
Handymax	 	506.4	 	499.3	 	7.1	 	1.4	%	
Handysize	 	1,574.7	 	1,548.2	 	26.5	 	1.7	%	
 	 	 	 	 	 	 	 	 	 	
Total	 	5,872.1	 	5,693.7	 	178.4	 	3.1	%	
 	 	 	 	 	 	 	 	 	 	
Operating days (3)	 	 	 	 	 	 	 	 	 	
Capesize	 	1,143.4	 	1,169.5	 	(26.1	)	(2.2	)%	
Panamax	 	707.9	 	678.4	 	29.5	 	4.3	%	
Ultramax	 	174.5	 	—	 	174.5	 	100.0	%	
Supramax	 	1,745.4	 	1,786.1	 	(40.7	)	(2.3	)%	
Handymax	 	470.7	 	492.7	 	(22.0	)	(4.5	)%	
Handysize	 	1,571.5	 	1,533.0	 	38.5	 	2.5	%	
 	 	 	 	 	 	 	 	 	 	
Total	 	5,813.4	 	5,659.7	 	153.7	 	2.7	%	
 	 	 	 	 	 	 	 	 	 	
Fleet utilization (4)	 	 	 	 	 	 	 	 	 	
Capesize	 	99.8	%	100.0	%	(0.2	)%	(0.2	)%	
Panamax	 	100.0	%	99.9	%	0.1	%	0.1	%	
Ultramax	 	100.0	%	—	 	100.0	%	100.0	%	
Supramax	 	99.0	%	99.4	%	(0.4	)%	(0.4	)%	
Handymax	 	92.9	%	98.7	%	(5.8	)%	(5.8	)%	
Handysize	 	99.8	%	99.0	%	0.8	%	0.8	%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	99.0	%	99.4	%	(0.4	)%	(0.4	)%	

 	 	For the Three Months Ended 
 March 31,	 	 	 	 	 	
 	 	Successor	 	Predecessor	 	Increase	 	 	 	
 	 	2015	 	2014	 	(Decrease)	 	% Change	 	
 	 	(U.S. dollars)	 	 	 	 	 	
Average Daily Results:	 	 	 	 	 	 	 	 	 	
Time Charter Equivalent (5)	 	 	 	 	 	 	 	 	 	
Capesize	 	$	4,121	 	$	15,767	 	$	(11,646	)	(73.9	)%	
Panamax	 	4,179	 	9,719	 	(5,540	)	(57.0	)%	
Ultramax	 	6,369	 	—	 	6,369	 	100.0	%	
Supramax	 	4,678	 	9,541	 	(4,863	)	(51.0	)%	
Handymax	 	4,946	 	9,806	 	(4,860	)	(49.6	)%	
Handysize	 	6,151	 	9,452	 	(3,301	)	(34.9	)%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	4,977	 	10,753	 	(5,776	)	(53.7	)%	
 	 	 	 	 	 	 	 	 	 	
Daily vessel operating expenses (6)	 	 	 	 	 	 	 	 	 	
Capesize	 	$	5,143	 	$	5,456	 	$	(313	)	(5.7	)%	
Panamax	 	4,520	 	5,410	 	(890	)	(16.5	)%	
Ultramax	 	4,461	 	—	 	4,461	 	100.0	%	
Supramax	 	4,853	 	5,364	 	(511	)	(9.5	)%	
Handymax	 	4,314	 	4,887	 	(573	)	(11.7	)%	
Handysize	 	4,382	 	5,041	 	(659	)	(13.1	)%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	4,686	 	5,256	 	(570	)	(10.8	)%	
 
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Definitions
 
In order to understand our discussion of our results of operations, it is important to understand the meaning of the following terms used in our analysis and the factors that influence our results of operations.
 
(1) Ownership days .  We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
 
(2) Available days .  We define available days as the number of our ownership days in a period less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels between time charters. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.
 
(3) Operating days .  We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
 
(4) Fleet utilization .  We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.
 
(5) TCE rates .  We define TCE rates as net voyage revenue (voyage revenues less voyage expenses) divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts.

 	 	For the Three Months Ended 
 March 31,	 	
 	 	Successor	 	Predecessor	 	
 	 	2015	 	2014	 	
 	 	 	 	 	 	
Voyage revenues (in thousands)	 	$	33,609	 	$	63,180	 	
Voyage expenses (in thousands)	 	4,380	 	1,956	 	
 	 	$	29,229	 	$	61,224	 	
Total available days	 	5,872.1	 	5,693.7	 	
Total TCE rate	 	$	4,977	 	$	10,753	 	
 
(6) Daily vessel operating expenses .  We define daily vessel operating expenses as vessel operating expenses divided by ownership days for the period.  Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses.
 
Operating Data
 
The following tables represent the operating data for the three months ended March 31, 2015 and 2014 on a consolidated basis for the Successor Company and Predecessor Company, respectively, which includes the operations of Baltic Trading. We did not compare the share and per share amounts, since the change in our capital structure as a result of the bankruptcy renders these not comparable between the Successor Company and the Predecessor Company.
 
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 	 	For the Three Months Ended 
 March 31,	 	 	 	 	 	
 	 	Successor	 	Predecessor	 	 	 	 	 	
 	 	2015	 	2014	 	Change	 	% Change	 	
 	 	(U.S. dollars in thousands, except for per share amounts)	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	
Voyage revenues	 	$	33,609	 	$	63,180	 	$	(29,571	)	(46.8	)%	
Service revenues	 	810	 	810	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Total revenues	 	34,419	 	63,990	 	(29,571	)	(46.2	)%	
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Voyage expenses	 	4,380	 	1,956	 	2,424	 	123.9	%	
Vessel operating expenses	 	28,672	 	31,223	 	(2,551	)	(8.2	)%	
General, administrative and management fees	 	20,324	 	15,376	 	4,948	 	32.2	%	
Depreciation and amortization	 	19,410	 	36,201	 	(16,791	)	(46.4	)%	
Impairment of vessel assets	 	35,396	 	—	 	35,396	 	100.0	%	
 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	108,182	 	84,756	 	23,426	 	27.6	%	
 	 	 	 	 	 	 	 	 	 	
Operating loss	 	(73,763	)	(20,766	)	(52,997	)	255.2	%	
Other expense	 	(4,289	)	(21,060	)	16,771	 	(79.6	)%	
 	 	 	 	 	 	 	 	 	 	
Loss before reorganization items, net	 	(78,052	)	(41,826	)	(36,226	)	86.6	%	
Reorganization items, net	 	(520	)	—	 	(520	)	100.0	%	
 	 	 	 	 	 	 	 	 	 	
Loss before income taxes	 	(78,572	)	(41,826	)	(36,746	)	87.9	%	
Income tax expense	 	(543	)	(412	)	(131	)	31.8	%	
 	 	 	 	 	 	 	 	 	 	
Net loss	 	(79,115	)	(42,238	)	(36,877	)	87.3	%	
Less: Net loss attributable to noncontrolling interest	 	(40,673	)	(3,133	)	(37,540	)	1,198.2	%	
Net loss attributable to Genco Shipping & Trading Limited	 	$	(38,442	)	$	(39,105	)	$	663	 	(1.7	)%	
 	 	 	 	 	 	 	 	 	 	
Net loss per share - basic	 	$	(0.64	)	$	(0.90	)	N/A	 	N/A	 	
Net loss per share - diluted	 	$	(0.64	)	$	(0.90	)	N/A	 	N/A	 	
Dividends declared and paid per share	 	$	—	 	$	—	 	$	—	 	—	 	
Weighted average common shares outstanding - basic	 	60,430,789	 	43,568,942	 	N/A	 	N/A	 	
Weighted average common shares outstanding - diluted	 	60,430,789	 	43,568,942	 	N/A	 	N/A	 	
 	 	 	 	 	 	 	 	 	 	
EBITDA (1)	 	$	(14,189	)	$	18,511	 	$	(32,700	)	(176.7	)%	

(1)          EBITDA represents net (loss) income attributable to Genco Shipping & Trading Limited plus net interest expense, taxes and depreciation and amortization.  EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers.  Our management uses EBITDA as a performance measure in our consolidated internal financial statements, and it is presented for review at our board meetings.  We believe that EBITDA is useful to investors as the shipping industry is capital intensive which often results in significant depreciation and cost of financing.  EBITDA presents investors with a measure in addition to net income to evaluate our performance prior to these costs.  EBITDA is not an item recognized by U.S. GAAP and should not be considered as an alternative to net income, operating income or any other indicator of a company’s operating performance required by U.S. GAAP.  EBITDA is not a measure of liquidity or cash flows as shown in our consolidated statements of cash flows.  The definition of EBITDA used here may not be comparable to that used by other companies.  The foregoing definition of EBITDA differs from the definition of Consolidated EBITDA used in the financial covenants of our 2007 Credit Facility (prior to its termination on the Effective Date), our $253 Million Term Loan Credit Facility, and our $100 Million Term Loan Credit Facility.  Specifically, Consolidated EBITDA substitutes gross interest expense (which includes amortization of deferred financing costs) for net interest expense used in our definition of EBITDA, includes adjustments for restricted stock amortization and non-cash charges for deferred financing costs related to the refinancing of other credit facilities or any non-cash losses from our investment in Jinhui and KLC, and excludes extraordinary
 
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gains or losses and gains or losses from derivative instruments used for hedging purposes or sales of assets other than inventory sold in the ordinary course of business.  The following table demonstrates our calculation of EBITDA and provides a reconciliation of EBITDA to net (loss) income attributable to Genco Shipping & Trading Limited for each of the periods presented above:

 	 	For the Three Months Ended March 31,	 	
 	 	Successor	 	Predecessor	 	
 	 	2015	 	2014	 	
 	 	 	 	 	 	
Net loss attributable to Genco Shipping & Trading Limited	 	$	(38,442	)	$	(39,105	)	
Net interest expense	 	4,300	 	21,003	 	
Income tax expense	 	543	 	412	 	
Depreciation and amortization	 	19,410	 	36,201	 	
 	 	 	 	 	 	
EBITDA (1)	 	$	(14,189	)	$	18,511	 	
 
Results of Operations
 
The following tables set forth information about the vessels in our fleet, including Baltic Trading’s vessels, as of May 8, 2015:
 
Genco Shipping & Trading Limited

Vessel	 	Year 
 Built	 	Charterer	 	Charter
Expiration (1)	 	Cash Daily 
 Rate (2)	
 	 	 	 	 	 	 	 	 	
Capesize Vessels	 	 	 	 	 	 	 	 	
Genco Augustus	 	2007	 	Swissmarine Asia Pte. Ltd.	 	March 2016	 	102% of BCI(3)	
Genco Tiberius	 	2007	 	Cargill International S.A.	 	November 2015	 	102% of BCI	
Genco London	 	2007	 	Cargill International S.A.	 	November 2015	 	102.5% of BCI	
Genco Titus	 	2007	 	Swissmarine Services S.A.	 	June 2015	 	104.5% of BCI	
Genco Constantine	 	2008	 	Cargill International S.A.	 	December 2015	 	102% of BCI	
Genco Hadrian	 	2008	 	Swissmarine Services S.A.	 	October 2015	 	98.5% of BCI	
Genco Commodus	 	2009	 	Swissmarine Asia Pte. Ltd.	 	March 2016	 	98.5% of BCI(4)	
Genco Maximus	 	2009	 	Swissmarine Services S.A.	 	February 2016	 	98.5% of BCI	
Genco Claudius	 	2010	 	Swissmarine Services S.A.	 	September 2015	 	99% of BCI	
Genco Tiger	 	2011	 	Swissmarine Services S.A.	 	October 2015	 	103% of BCI(5)	
Baltic Lion	 	2012	 	Swissmarine Services S.A.	 	November 2015	 	103% of BCI(6)	
 	 	 	 	 	 	 	 	 	
Panamax Vessels	 	 	 	 	 	 	 	 	
Genco Beauty	 	1999	 	Navig8 Inc.	 	June 2015	 	94.5% of BPI	
Genco Knight	 	1999	 	Swissmarine Services S.A.	 	June 2015	 	99% of BPI	
Genco Leader	 	1999	 	Navig8 Pan8 Pool Inc.	 	August 2015	 	Spot Pool(7)	
Genco Vigour	 	1999	 	Swissmarine Services S.A.	 	July 2015	 	98% of BPI	
Genco Acheron	 	1999	 	Swissmarine Services S.A.	 	July 2015	 	98% of BPI	
Genco Surprise	 	1998	 	Swissmarine Services S.A.	 	June 2015	 	100% of BPI	
Genco Raptor	 	2007	 	Global Maritime Investments Ltd.	 	June 2015	 	100% of BPI	
Genco Thunder	 	2007	 	Swissmarine Services S.A.	 	August 2015	 	100% of BPI(8)	
 	 	 	 	 	 	 	 	 	
Supramax Vessels	 	 	 	 	 	 	 	 	
Genco Predator	 	2005	 	Oldendorff GMBH & Co.	 	May 2015	 	$6,500(9)	
Genco Warrior	 	2005	 	Trammo Bulk Carriers	 	June 2015	 	$7,250(10)	
Genco Hunter	 	2007	 	Pioneer Navigation Ltd.	 	December 2015	 	106.5% of BSI	
Genco Cavalier	 	2007	 	Oldendorff GMBH & Co.	 	May 2015	 	$5,500(11)	
Genco Lorraine	 	2009	 	Pioneer Navigation Ltd.	 	June 2015	 	$7,750(12)	
Genco Loire	 	2009	 	China Pacific Maritime Inc.	 	June 2015	 	$6,000(13)	
 
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Genco Aquitaine	 	2009	 	Bulkhandling Handymax A/S	 	August 2015	 	Spot Pool(14)	
Genco Ardennes	 	2009	 	Bulkhandling Handymax A/S	 	August 2015	 	Spot Pool(14)	
Genco Auvergne	 	2009	 	Pioneer Navigation Ltd.	 	December 2015	 	100% of BSI	
Genco Bourgogne	 	2010	 	Clipper Sapphire Pool	 	November 2015	 	Spot Pool(15)	
Genco Brittany	 	2010	 	Clipper Sapphire Pool	 	November 2015	 	Spot Pool(15)	
Genco Languedoc	 	2010	 	Chun An Chartering Co. Ltd.	 	May 2015	 	$7,000(16)	
Genco Normandy	 	2007	 	Bulk Marine Ltd.	 	May 2015	 	$6,200(17)	
Genco Picardy	 	2005	 	Oldendorff GMBH & Co.	 	May 2015	 	$5,500(18)	
Genco Provence	 	2004	 	Pioneer Navigation Ltd.	 	July 2015	 	100% of BSI	
Genco Pyrenees	 	2010	 	Clipper Sapphire Pool	 	November 2015	 	Spot Pool(15)	
Genco Rhone	 	2011	 	Pioneer Navigation Ltd.	 	November 2015	 	100% of BSI	
 	 	 	 	 	 	 	 	 	
Handymax Vessels	 	 	 	 	 	 	 	 	
Genco Success	 	1997	 	Caltrek Freight and Trading Ltd.	 	May 2015	 	91.5% of BSI	
Genco Carrier	 	1998	 	Polaris Shipping Co. Ltd.	 	April 2015	 	$3,000(19)	
Genco Prosperity	 	1997	 	Centurion Bulk Pte. Ltd. Singapore	 	June 2015	 	89% of BSI(20)	
Genco Wisdom	 	1997	 	ED & F MAN Shipping Ltd.	 	May 2015/Feb. 2016	 	90%/89% of BSI(21)	
Genco Marine	 	1996	 	TST NV, Nevis	 	February 2016	 	87% of BSI(22)	
Genco Muse	 	2001	 	Western Bulk Pte. Ltd.	 	May 2015	 	$4,500(23)	
 	 	 	 	 	 	 	 	 	
Handysize Vessels	 	 	 	 	 	 	 	 	
Genco Sugar	 	1998	 	Clipper Logger Pool	 	November 2015	 	Spot Pool(24)	
Genco Pioneer	 	1999	 	Clipper Logger Pool	 	November 2015	 	Spot Pool(24)	
Genco Progress	 	1999	 	Clipper Logger Pool	 	November 2015	 	Spot Pool(24)	
Genco Explorer	 	1999	 	Clipper Logger Pool	 	November 2015	 	Spot Pool(24)	
Genco Reliance	 	1999	 	Clipper Logger Pool	 	November 2015	 	Spot Pool(24)	
Genco Charger	 	2005	 	Pacific Basin Chartering Ltd.	 	June 2015	 	98% of BHSI(25)	
Genco Challenger	 	2003	 	Pacific Basin Chartering Ltd.	 	June 2015	 	98% of BHSI	
Genco Champion	 	2006	 	Pacific Basin Chartering Ltd.	 	August 2015	 	100% of BHSI	
Genco Ocean	 	2010	 	Pioneer Navigation Ltd.	 	June 2015	 	107% of BHSI	
Genco Bay	 	2010	 	Pacific Basin Chartering Ltd.	 	May 2015	 	107% of BHSI	
Genco Avra	 	2011	 	Pioneer Navigation Ltd.	 	September 2015	 	107% BHSI	
Genco Mare	 	2011	 	Cargill International S.A./Pioneer Navigation Ltd.	 	May 2015/April 2016	 	115%/103.5% of BHSI(26)	
Genco Spirit	 	2011	 	Clipper Bulk Shipping Ltd.	 	September 2015	 	$8,000	

(1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course.  Under the terms of each contract, the charterer is entitled to extend the time charter from two to four months in order to complete the vessel’s final voyage plus any time the vessel has been off-hire.
 
(2) Time charter rates presented are the gross daily charterhire rates before third-party brokerage commission generally ranging from 1.25% to 6.25%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents’ fees and canal dues.
 
(3) We have reached an agreement with Swissmarine Asia Pte. Ltd. on a spot market-related time charter for 10.5 to 13.5 months based on 102% of the Baltic Capesize Index (BCI), published by the Baltic Exchange, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. We maintain the option to convert to a fixed rate based on Capesize FFA values at 102%.  The vessel delivered to charterers on April 29, 2015.
 
(4) We have agreed to an extension with Swissmarine Asia Pte. Ltd. on a spot market-related time charter for 10.5 to 13.5 months based on 98.5% of the BCI, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. We maintain the option to convert to a fixed rate based on Capesize FFA values at 98.5%.  The extension began on April 20, 2015.
 
(5) This vessel was renamed Genco Tiger on April 30, 2015.
 
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(6) This vessel is to be renamed Genco Lion.
 
(7) We have reached an agreement to enter this vessel into the Navig8 Pan8 Pool, a vessel pool trading in the spot market of which Navig8 Inc. acts as the pool manager.  We can withdraw the vessel with three months notice.
 
(8) We have agreed to an extension with Swissmarine Services S.A. on a spot market-related time charter for 3 to 5.5 months based on 100% of the Baltic Panamax Index (BPI), published by the Baltic Exchange, as reflected in daily reports.  Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission.  We maintain the option to convert to a fixed rate based on Panamax FFA values at 100%.  The extension is expected to begin on or about May 11, 2015.
 
(9) We have reached an agreement with Oldendorff GMBH & Co. on a time charter for 25 days at a rate of $6,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 26, 2015 after repositioning. The vessel redelivered to us on April 21, 2015.
 
(10) We have reached an agreement with Trammo Bulk Carriers on a time charter for 3 to 7.5 months at a rate of $7,250 per day.  Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission.  The vessel delivered to charterers on February 15, 2015 after repositioning.  The vessel redelivered to us on February 13, 2015.
 
(11) We have reached an agreement with Oldendorff GMBH & Co. on a time charter for 25 days at a rate of $5,500 per day.  Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 26, 2015 after repositioning. The vessel redelivered to us on April 20, 2015.
 
(12) We have agreed to an extension with Pioneer Navigation Ltd. on a time charter for 3.5 to 7.5 months at a rate of $7,750 per day.  Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission.  The extension began on March 8, 2015.
 
(13) We have reached an agreement with China Pacific Maritime Inc. on a time charter for approximately 65 days at a rate of $6,000 per day.  Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission.  The vessel delivered to charterers on March 22, 2015.
 
(14) We have reached an agreement to enter these vessels into the Bulkhandling Handymax A/S Pool, a vessel pool trading in the spot market of which Torvald Klaveness acts as the pool manager. We can withdraw a vessel with three months’ notice.
 
(15) We have reached an agreement to enter these vessels into the Clipper Sapphire Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager.  We can withdraw a vessel with a minimum notice of six months.
 
(16) The vessel redelivered to us on May 1, 2015 and is currently in drydocking for scheduled maintenance.
 
(17) We have reached an agreement with Bulk Marine Ltd. on a time charter for approximately 25 days at a rate of $6,200 per day.  Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 21, 2015 after repositioning. The vessel redelivered to us on April 16, 2015.
 
(18) The vessel redelivered to Genco on May 7, 2015 and is currently awaiting next employment.
 
(19) The vessel redelivered to us on April 22, 2015 and is currently in drydocking for scheduled maintenance.
 
(20) We have reached an agreement with Centurion Bulk Pte. Ltd. Singapore on a time charter for 3 to 6.5 months based on 89% of the Baltic Supramax Index (BSI), published by the Baltic Exchange, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission.  We maintain the option to convert to a fixed rate based on Supramax FFA values at 89%.  The vessel delivered to charterers on February 15, 2015.
 
(21) We have agreed to an extension with ED & F MAN Shipping Ltd. on a spot market-related time charter for 9.5 to 12.5 months based on 89% of the BSI, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission.  Genco maintains the option to convert to a fixed rate based on Supramax FFA values at 89%.  The extension is expected to begin after the vessel exits drydocking for scheduled maintenance.
 
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(22) We have reached an agreement with TST, NV Nevis on a spot market-related time charter based on 87% of the BSI, as reflected in daily reports. The minimum and maximum expiration dates of the time charter are February 8, 2016 and April 8, 2016, respectively. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about May 9, 2015 after repositioning.  The vessel redelivered to us on May 4, 2015.
 
(23) We have reached an agreement with Western Bulk Pte. Ltd. on a time charter for approximately 18 days at a rate of $4,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 24, 2015 after repositioning. The vessel redelivered to us on April 18, 2015.
 
(24) We have reached an agreement to enter these vessels into the Clipper Logger Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager.  Genco can withdraw the vessels with a minimum notice of six months.
 
(25) We have agreed to an extension with Pacific Basin Chartering Ltd. on a spot market-related time charter for 3 to 6.5 months based on 98% of the Baltic Handysize Index (BHSI), published by the Baltic Exchange, as reflected in daily reports except for the initial 35 days in which hire is based on 95% of the Baltic Handysize HS5 route. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission.  We maintain the option to convert to a fixed rate based on Handysize FFA values at 98%.  The extension began on March 27, 2015 after the vessel completed drydocking for scheduled maintenance.
 
(26) We have reached an agreement with Pioneer Navigation Ltd. on a spot market-related time charter for 10.5 to 13.5 months based on 103.5% of the BHSI, as reflected in daily reports except for the initial 35 days in which hire is based on 103.5% of the Baltic Handysize HS5 route. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission.  Genco maintains the option to convert to a fixed rate based on Handysize FFA values at 103.5%.  The vessel is expected to deliver to charterers on or about May 20, 2015 after the conclusion of the current time charter with Cargill International S.A.
 
Baltic Trading Limited

Vessel	 	Year 
 Built	 	Charterer	 	Charter
Expiration(1)	 	Cash Daily
Rate	 	Expected 
 Delivery(2)	
 	 	 	 	 	 	 	 	 	 	 	
Capesize Vessels	 	 	 	 	 	 	 	 	 	 	
Baltic Bear	 	2010	 	Swissmarine Services S.A.	 	April 2016	 	102.5% of BCI (3)	 	 	
Baltic Wolf	 	2010	 	Swissmarine Services S.A.	 	November 2015	 	101.5% of BCI (4)	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Ultramax Vessels	 	 	 	 	 	 	 	 	 	 	
Baltic Hornet	 	2014	 	Swissmarine Asia Pte. Ltd.	 	November 2015	 	115.5% of BSI (5)	 	 	
Baltic Wasp	 	2015	 	Pioneer Navigation Ltd.	 	December 2015	 	115% of BSI (6)	 	 	
Baltic Scorpion	 	2015	 	TBD	 	TBD	 	TBD	 	Q2 2015	
Baltic Mantis	 	2015	 	TBD	 	TBD	 	TBD	 	Q3 2015	
 	 	 	 	 	 	 	 	 	 	 	
Supramax Vessels	 	 	 	 	 	 	 	 	 	 	
Baltic Leopard	 	2009	 	Western Bulk Pte. Ltd.	 	August 2015	 	$7,000 (7)	 	 	
Baltic Panther	 	2009	 	Bulkhandling Handymax A/S	 	August 2015	 	Spot Pool (8)	 	 	
Baltic Jaguar	 	2009	 	Harmony Innovation Shipping Ltd.	 	June 2015	 	$6,500 (9)	 	 	
Baltic Cougar	 	2009	 	Bulkhandling Handymax A/S	 	August 2015	 	Spot Pool (8)	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Handysize Vessels	 	 	 	 	 	 	 	 	 	 	
Baltic Wind	 	2009	 	Trammo Bulk Carriers	 	January 2016	 	107% of BHSI (10)	 	 	
Baltic Cove	 	2010	 	Trammo Bulk Carriers	 	May 2015	 	106% of BHSI (11)	 	 	
Baltic Breeze	 	2010	 	Clipper Bulk Shipping Ltd.	 	July 2015	 	103.5% of BHSI (12)	 	 	
Baltic Fox	 	2010	 	Clipper Logger Pool	 	November 2015	 	Spot Pool (13)	 	 	
Baltic Hare	 	2009	 	Clipper Logger Pool	 	November 2015	 	Spot Pool (13)	 	 	

(1)          The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course.  Under the terms of each contract, the charterer is entitled to extend the time charters from two to four months in order to complete the vessel’s final voyage plus any time the vessel has been off-hire.
 
(2)          The dates for the vessels being delivered in the future are estimates based on guidance received from the sellers.
 
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(3)         We have agreed to an extension with Swissmarine Services S.A. on a spot market-related time charter for 11 to 13.5 months based on 102.5% of the average of the daily rates of the Baltic Capesize Index (BCI), published by the Baltic Exchange, as reflected in daily reports.  Hire is paid in arrears net of a 5.75% brokerage commission, which includes the 1.25% commission payable to GS&T.  The extension began on May 1, 2015 after the vessel exited drydocking for scheduled maintenance.
 
(4)          We have reached an agreement with Swissmarine Services S.A. on a spot market-related time charter for 11.5 to 14.5 months based on 101.5% of the average of the daily rates of the BCI, as reflected in daily reports.  Hire is paid every 15 days in arrears net of a 5.00% brokerage commission, which includes the 1.25% commission payable to GS&T.  The vessel delivered to charterers on December 9, 2014.
 
(5)          We have reached an agreement with Swissmarine Asia Pte. Ltd. on a spot market-related time charter for 12 to 15 months based on 115.5% of the average of the daily rates of the Baltic Supramax Index (BSI), published by the Baltic Exchange, as reflected in daily reports.  Hire is paid every 15 days in arrears net of a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T. The vessel delivered to charterers on November 1, 2014.
 
(6)          We have reached an agreement with Pioneer Navigation Ltd. on a spot market-related time charter for 11.5 to 14.5 months based on 115% of the average of the daily rates of the BSI, as reflected in daily reports. Hire is paid every 15 days in arrears net of a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T.  The vessel delivered to charterers on January 6, 2015.
 
(7)          We have reached an agreement with Western Bulk Pte. Ltd. on a time charter for 3.5 to 7.5 months at  a rate of $7,000 per day except for the initial 40 days of the time charter in which the hire rate is $5,000 per day. Hire is paid every 15 days in advance less a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T. The vessel is expected to deliver to charterers on or about May 9, 2015 after repositioning. The vessel redelivered to Baltic Trading on May 4, 2015.
 
(8)          We have reached an agreement to enter these vessels into the Bulkhandling Handymax A/S Pool, a vessel pool trading in the spot market of which Torvald Klaveness acts as the pool manager. Baltic Trading can withdraw a vessel with three months’ notice.
 
(9)          We have reached an agreement with Harmony Innovation Shipping Ltd. on a time charter for approximately 25 days at a rate of $6,500 per day. Hire is paid every 15 days in advance less a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T. The vessel is expected to deliver to charterers on or about May 9, 2015 after repositioning. The vessel redelivered to Baltic Trading on May 4, 2015.
 
(10)   We have reached an agreement with Trammo Bulk Carriers on a spot-market related time charter for 15.5 to 19.5 months based on 107% of the average of the daily rates of the Baltic Handysize Index (BHSI), published by the Baltic Exchange, as reflected in daily reports.  Hire is paid every 15 days in arrears net of a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T.  The vessel delivered to charterers on October 3, 2014.
 
(11)   We have reached an agreement with Trammo Bulk Carriers on a spot market-related time charter for a minimum of 10.5 months based on 106% of the average of the daily rates of the BHSI, as reflected in daily reports. Hire is paid every 15 days in arrears net of a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T.
 
(12)   We have reached an agreement with Clipper Bulk Shipping Ltd. on a spot-market related time charter based on 103.5% of the average of the daily rates of the BHSI, as reflected in daily reports. Hire is paid every 15 days in arrears net of a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T.  The minimum and maximum expiration dates of the time charter are July 17, 2015 and October 1, 2015, respectively. The vessel delivered to charterers on November 7, 2014.
 
(13)   We have reached an agreement to enter these vessels into the Clipper Logger Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager.  Baltic Trading can withdraw the vessels with a minimum notice of six months.
 
Three months ended March 31, 2015 compared to the three months ended March 31, 2014
 
VOYAGE REVENUES-
 
For the three months ended March 31, 2015, voyage revenues decreased 46.8% to $33.6 million as compared to $63.2 million for the three months ended March 31, 2014.  The decrease in voyage revenues was primarily due to lower rates achieved by our vessels.  Included in the decrease in voyage revenues was a decrease in revenues earned by Baltic Trading’s vessels of $6.2 million due to lower rates achieved by its vessels partially offset by the increase in the size of its fleet during the first quarter of 2015 as compared to the first quarter of 2014.
 
The average Time Charter Equivalent (“TCE”) rate of our fleet decreased 53.7% to $4,977 a day for the three months ended March 31, 2015 from $10,753 a day for the three months ended March 31, 2014.  The decrease in TCE rates resulted from lower
 
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charter rates achieved during the first quarter of 2015 as compared to the same period last year.  During the first quarter of 2015, excess vessel supply continued to weigh on the drybulk market. Several other factors also contributed towards a weakened rate environment across all vessel classes. Destocking of iron ore inventories at Chinese ports and coal inventories at Chinese power plants, along with seasonally reduced iron ore exports out of Brazil, adversely affected the earnings of Capesize vessels.  Furthermore, the sustained Indonesian mineral ore export ban, a decline in steel output, and reduced coal demand all contributed to negatively impact freight rates. Weakened earnings along with strong scrap prices did, however, result in a record pace of demolitions, noticeably reducing net fleet growth for the first quarter of 2015.
 
For the three months ended March 31, 2015 and 2014, we had 6,118.9 and 5,940.0 ownership days, respectively.  The increase in ownership days is a result of the delivery of the Baltic Hornet and Baltic Wasp during the fourth quarter of 2014 and the first quarter of 2015.  Fleet utilization decreased to 99.0% from 99.4% during the three months ended March 31, 2015 as compared to the three months ended March 31, 2014 primarily due to additional offhire periods during the three months ended March 31, 2015 for some of our Handymax vessels.
 
SERVICE REVENUES-
 
Service revenues consist of revenues earned from providing technical services to MEP pursuant to the agency agreement between us and MEP.  These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services are provided for a fee of $750 per ship per day.  During the three months ended March 31, 2015 and 2014, total service revenue was $0.8 million during both periods.
 
VOYAGE EXPENSES-
 
In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. There are certain other non-specified voyage expenses such as commissions which are typically borne by us. Voyage expenses include port and canal charges, fuel (bunker) expenses and brokerage commissions payable to unaffiliated third parties. Port and canal charges and bunker expenses primarily increase in periods during which vessels are employed on voyage charters because these expenses are for the account of the vessel owner. At the inception of a time charter, we record the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses and the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.
 
Voyage expenses increased by $2.4 million from $2.0 million during the three months ended March 31, 2014 as compared to $4.4 million during the three months ended March 31, 2015.  The increase was primarily due to an increase in net bunker losses recorded during the first quarter of 2015 based on the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a result of the decrease in bunker prices.  Additionally, there was an increase in voyage expenses as our bunker inventory was written down to its market value as of March 31, 2015.  These increases were partially offset by a decrease in third-party broker commissions as a result of the decrease in voyage revenue earned during the first quarter of 2015 as compared to the first quarter of 2014.
 
VESSEL OPERATING EXPENSES-
 
Vessel operating expenses decreased by $2.6 million from $31.2 million during the first quarter of 2014 to $28.7 million during the first quarter of 2015.  This decrease was primarily due to lower maintenance related expenses, including expenses incurred during drydocking, as well as a decrease in the purchase of stores.  These decreases were partially offset by an increase in the size of Baltic Trading’s fleet due to the delivery of the Baltic Hornet and Baltic Wasp during the fourth quarter of 2014 and first quarter of 2015, respectively.
 
Daily vessel operating expenses decreased to $4,686 per vessel per day for the three months ended March 31, 2015 from $5,256 per day for the three months ended March 31, 2014.  The decrease in daily vessel operating expenses was due to lower maintenance related expenses, including expenses incurred during drydocking.  Additionally, there were decrease in insurance costs and the purchase of stores and spareparts.  We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.  Our actual daily vessel operating expenses per vessel for the three months ended March 31, 2015 were $634 below the weighted-average budgeted rate of $5,320 per vessel per day.
 
Our vessel operating expenses, which generally represent fixed costs for each vessel, will increase if our fleet expands. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for crewing, lubes, and insurance, may also cause these expenses to increase.
 
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GENERAL, ADMINISTRATIVE AND MANAGEMENT FEES-
 
For the three months ended March 31, 2015 and 2014, general, administrative and management fees were $20.3 million and $15.4 million, respectively.  The increase was primarily due higher non-cash compensation and legal expenses during the first quarter of 2015 partially offset by a decrease in expenses related to our Chapter 11 Cases incurred.  We incur management fees to third-party technical management companies for the day-to-day management of our vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies.  Management fees increased marginally due to the delivery of two Baltic Trading vessels during the fourth quarter of 2014 and the first quarter of 2015.
 
DEPRECIATION AND AMORTIZATION-
 
We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years. On the Effective Date, as part of fresh-start reporting, we revalued our vessels assets which resulted in a decrease in vessels assets, vessel equipment recorded as a component of other fixed assets and drydocking assets. On the Effective Date, we also increased the scrap value of our vessels from $245/lwt to $310/lwt which will result in an overall decrease in vessels depreciation expense over the remaining life of the vessels.
 
Depreciation and amortization expense decreased by $16.8 million to $19.4 million during the three months ended March 31, 2015 as compared to $36.2 million during the three months ended March 31, 2014.  This decrease was due to a revaluation of the vessel assets as well as the change in the scrap value as mentioned above.  These decreases were partially offset by the operation of a larger fleet during the first quarter of 2015 as compared to the first quarter of 2014 due to the delivery of the Baltic Hornet during the fourth quarter of 2014 and the Baltic Wasp during the first quarter of 2015.
 
IMPAIRMENT OF VESSEL ASSETS -
 
During the three months ended March 31, 2015, we recorded $35.4 million of Impairment of vessel assets.   T he Company determined that the sale of two of Baltic Trading’s vessels, the Baltic Lion and Baltic Tiger, was more likely than not based on Baltic Trading’s expressed consideration to divest of those vessels.  Therefore, the time utilized to determine the recoverability of the carrying value of the vessel assets was significantly reduced, and after determining that the sum of the estimated undiscounted future cash flows attributable to the Baltic Lion and Baltic Tiger would not exceed the carrying value of the respective vessels, the Company reduced the carrying value of each vessel to its fair market value.    For this reason, the Company recorded an impairment charge for these vessels.  Refer to Note 1 — General information in our condensed consolidated financial statements for further information. There was no Impairment of vessel assets during the three months ended March 31, 2014.
 
OTHER (EXPENSE) INCOME-
 
NET INTEREST EXPENSE-
 
Net interest expense decreased by $16.7 million from $21.0 million during the three months ended March 31, 2014 to $4.3 million during the three months ended March 31, 2015.  Net interest expenses during the three months ended March 31, 2015 consisted of interest expense under our $100 Million Term Loan Facility, $253 Million Term Loan Facility, the Baltic Trading $22 Million Term Loan Facility, the Baltic Trading $44 Million Term Loan Facility and the 2014 Baltic Trading Term Loan Facilities.  Additionally, during the three months ended March 31, 2015, we recorded interest expense for the 2010 Baltic Trading Credit Facility until January 7, 2015 when Baltic Trading refinanced the outstanding indebtedness under this facility with the Baltic Trading $148 Million Credit Facility for which we recorded interest expense for the remainder of the first quarter of 2015.  Net interest expense during the three months ended March 31, 2014 consisted of interest expense under the 2007 Credit Facility, $100 Million Term Loan Facility, $253 Million Term Loan Facility, the 2010 Baltic Trading Credit Facility, the Baltic Trading $22 Million Term Loan Facility, the Baltic Trading $44 Million Term Loan Facility, as well as interest expense related to our 5.0% Convertible Senior Notes (the “2010 Notes”).  The 2007 Credit Facility and 2010 Notes were terminated upon our emergence from bankruptcy on the Effective Date.  Additionally, interest income, unused commitment fees associated with the aforementioned credit facilities as well as the amortization of deferred financing costs related to the aforementioned credit facilities are included in net interest expense during the three months ended March 31, 2015 and 2014.
 
The decrease in net interest expense for the first quarter of 2015 as compared to the first quarter of 2014 was primarily due to a decrease in interest expense and amortization of deferred financing fees associated with the 2007 Credit Facility, which was terminated pursuant to the Plan on the Effective Date, and the interest rate swap agreements as three interest rate swap agreements
 
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expired during the first quarter of 2014. Additionally, there was a decrease in interest expense related to the 2010 Notes as we ceased accreting the liability related to the 2010 Notes and accruing for the related coupon payment on the Petition Date of April 21, 2014.  Refer to Note 9 — Debt, Note 10 — Convertible Senior Notes and Note 11 — Interest Rate Swap Agreements in our Condensed Consolidated Financial Statements.  These decreases were partially offset by an increase in interest expense related to the Baltic Trading 2014 Term Loan Facilities, which were entered into by Baltic Trading on October 8, 2014.
 
REORGANIZATION ITEMS, NET
 
For the three months ended March 31, 2015, reorganization items, net were $0.5 million. These reorganization items include trustee fees and professional fees incurred after the Petition Date in relation to the Chapter 11 Cases.   Refer to Note 19 — Reorganization items, net in our Condensed Consolidated Financial Statements for further detail. There were no reorganization items during the three months ended March 31, 2014 as the Petition Date was April 21, 2014.
 
INCOME TAX EXPENSE-
 
For the three months ended March 31, 2015, income tax expense was $0.5 million as compared to $0.4 million during the three months ended March 31, 2014.  This income tax expense consists primarily of federal, state and local income taxes on net income earned by Genco Management (USA) Limited (“Genco (USA)”), one of our wholly-owned subsidiaries.  Pursuant to certain agreements, we technically and commercially manage vessels for Baltic Trading, as well as provide technical management of vessels for MEP in exchange for specified fees for these services provided.  These services are provided by Genco (USA), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) is subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services.  Refer to the “Income taxes” section of Note 2 — Summary of Significant Accounting Policies included in our Condensed Consolidated Financial Statements for further information.  The increase in income tax expense during the three months ended March 31, 2015 as compared to the same period during the prior year is primarily due to additional income earned by Genco (USA) during the three months ended March 31, 2015.  This was primarily due to the 1% purchase fee earned by Genco (USA) from Baltic Trading pursuant to the Management Agreement related to the delivery of the Baltic Wasp during the first quarter of 2015.  The purchase fees eliminate upon consolidation; however, the fees are included in the net income earned by Genco (USA) and are taxable.  This increase was partially offset by a decrease in commercial service revenue due to Genco (USA) from Baltic Trading pursuant to the Management Agreement as a result of lower charter rates achieved by Baltic Trading’s fleet.
 
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST-
 
For the three months ended March 31, 2015 and 2014, net loss attributable to noncontrolling interest was $40.7 million and $3.1 million, respectively.  These amounts represent the net loss attributable to the noncontrolling interest of Baltic Trading.
 
LIQUIDITY AND CAPITAL RESOURCES
 
Our principal sources of funds are currently operating cash flows and long-term bank borrowings.  We have also historically used issuances of equity and long-term debt securities as sources of financing and may do so in the future.  Our principal use of funds is capital expenditures to establish and grow our fleet, maintain the quality of our vessels, comply with international shipping standards and environmental laws and regulations, and fund working capital requirements and repayments on outstanding loan facilities.
 
Our current liquidity needs arise primarily from drydocking for our vessels, and working capital requirements as may be needed to support our business and payments required under our indebtedness.  Our primary sources of liquidity are cash flow from operations and cash on hand, including the proceeds of the $100 million rights offering that was consummated in connection with the Chapter 11 Cases. Subject to the resolution of the below issues related to our credit facilities, we believe that internally generated cash flow and cash on hand will be sufficient to fund the operations of our fleet, including our working capital requirements, for the next twelve months.  We expect that our liquidity needs will continue to arise primarily from capital expenditures for our vessels, working capital requirements as may be needed to support our business and payments required under our indebtedness. Our current and future liquidity will greatly depend upon our operating results. Our ability to continue to meet our liquidity needs is subject to and will be affected by cash utilized in operations, the economic or business environment in which we operate, weakness in shipping industry conditions, the financial condition of our customers, vendors and service providers, our ability to comply with the financial and other covenants of our post-restructuring indebtedness, and other factors. Additionally, the Chapter 11 Cases, including the fact that we have been subject to bankruptcy proceedings, and related matters could negatively impact our financial condition.
 
Historically, we have used funds to pay dividends and to repurchase our common stock from time to time. We have not declared or paid any dividends since the third quarter of 2008 and currently do not plan to resume the payment of dividends. 
 
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Moreover, pursuant to restrictions under our credit facilities, we are currently prohibited from paying dividends.  Future dividends, if any, will depend on, among other things, our cash flows, cash requirements, financial condition, results of operations, required capital expenditures or reserves, contractual restrictions, provisions of applicable law and other factors that our board of directors may deem relevant.
 
Given the negative impact of the current weak drybulk rate environment on our earnings, we face potential liquidity and covenant compliance issues. Our credit facilities require us to maintain a minimum cash balance of $41.3 million certain portions of which can be satisfied by undrawn working capital lines. In light of our requirements to fund our ongoing operations and make payments under our credit facilities, our current cash reserves, and current drybulk shipping rates, we believe that without taking measures that are available to us, we may not remain in compliance with our minimum cash covenants under our credit facilities during 2015. To address our compliance, Genco may seek waivers or modifications to our credit agreements, seek to refinance our indebtedness or raise additional capital through debt or equity offerings, sell assets (including vessels), reduce or delay capital expenditures, or pursue other options available to us.
 
In addition, under the collateral maintenance covenants of our 2015 Revolving Credit Facility, $253 Million Term Loan Facility, our $100 Million Term Loan Facility, the Baltic Trading $148 Million Credit Facility, the Baltic Trading $22 Million Term Loan Facility, the Baltic Trading $44 Million Term Loan Facility and the 2014 Baltic Trading Term Loan Facilities, the aggregate valuations of our vessels pledged under each facility must at least be a certain percentage of loans outstanding , which percentages currently are 140%, 135%, 130%, 140%, 130%, 125% and 135%, respectively.  If this test is not met, we may be required to take certain actions to remedy the shortfall.  See “Critical Accounting Policies — Vessels and Depreciation” below for further details of our vessel valuations.
 
Following the procurement of vessel valuations in February 2015, we did not meet the 130% collateral maintenance test under the $100 Million Term Loan Facility. The actual percentage measured by us was 122.4%, representing an approximate shortfall of approximately $5.2 million.  Under the terms of the credit facility, we must remedy such shortfall within 30 days from the time it is notified by the security agent.  We were not notified by the security agent to take any actions to remedy this shortfall.  On April 24, 2015, we added one of our unencumbered Handysize vessels, the Genco Sugar, as additional collateral to cover the shortfall and satisfy the collateral maintenance test.  The next date that valuations under this credit facility will be required is on or around August 17, 2015.
 
At December 31, 2014, we did not meet the 135% collateral maintenance test under the $253 Million Term Loan Facility.  The actual percentage measured by us was 130.7% at December 31, 2014 and 134.8% on January 9, 2015 following the Company’s scheduled amortization payment of $5.1 million.  Under the terms of the credit facility, we must remedy such shortfall within 30 days from the time it is notified by the security agent.  We were not notified by the security agent to take any action to remedy this slight shortfall.  We were in communication with the facility’s agent, and we prepaid $0.2 million of the outstanding indebtedness on March 2, 2015, which reduced the next scheduled amortization payment of $5.1 million, which was paid in early April 2015. The next date that vessel valuations under this credit facility will be required is on or around June 30, 2015.
 
Given the recent downward trend in vessel values, we believe we may not meet the minimum threshold under the collateral maintenance covenant in one or more of our credit facilities when new vessel valuations are required on or around June 30, 2015.  To remedy this, we may pledge additional collateral (including vessels), prepay a portion of our indebtedness, seek waivers or modifications to our credit agreements (which may be unavailable or subject to conditions), or take other actions available to us.  If we fail to remedy any shortfall under our collateral maintenance covenants and are found to be in default, it could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.
 
As of March 31, 2015, Genco Investments LLC owns 6,356,471 shares of Baltic Trading’s Class B Stock, which represents an 10.85% ownership interest in Baltic Trading and 64.60% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock.  On April 7, 2015, we entered into a definitive merger agreement with Baltic Trading under which we will acquire Baltic Trading in a stock-for-stock transaction.  Under the terms of the agreement, Baltic Trading will become our indirect wholly-owned subsidiary, and Baltic Trading shareholders (other than GS&T and its subsidiaries) will receive 0.216 shares of our common stock for each share of Baltic Trading’s common stock they own at closing, with fractional shares to be settled in cash.  Upon consummation of the transaction, our shareholders are expected to own approximately 84.5% of the combined company, and Baltic Trading’s shareholders (other than the GS&T and its subsidiaries) are expected to own approximately 15.5% of the combined company.  Shares of Baltic Trading’s Class B stock (all of which are owned by us) will be canceled in the merger.  We expect to have our stock listed on the New York Stock Exchange upon consummation of the transaction.
 
Our Board of Directors and Baltic Trading’s Board of Directors established independent special committees to review the transaction and negotiate the terms on behalf of their respective companies.  Both independent special committees unanimously approved the transaction.  The Boards of Directors of both companies approved the merger by unanimous vote of directors present and
 
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voting, with Peter C. Georgiopoulos, Chairman of the Board of each company, recused for the vote.  Approval of the merger is subject to a vote of both our shareholders and Baltic Trading’s shareholders.
 
Additionally, on April 7, 2015, we entered into an agreement under which we acquired all of the shares of two single-purpose entities that were wholly owned by Baltic Trading, each of which owns one Capesize drybulk vessel, for an aggregate purchase price of $68.5 million, subject to reduction for $40.6 million of outstanding first-mortgage debt of such single-purpose entities that is to be guaranteed by the Company and an adjustment for the difference between such single-purpose entities’ current assets and total liabilities as of the closing date At March 31, 2015, the Company determined that the sale of the Baltic Lion and Baltic Tiger were more likely than not based on Baltic Trading’s expressed consideration to divest of those vessels to increase its liquidity position and strengthen its balance sheet.  Through the transactions, which closed on April 8, 2015, we acquired the vessels known as the Baltic Lion and the Baltic Tiger. The independent special committees of both companies’ Boards of Directors reviewed and approved this transaction.
 
On April 7, 2015, five of our wholly-owned subsidiaries, Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited (collectively, the “Subsidiaries”) entered into a loan agreement by and among the Subsidiaries, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent, security agent, and as lender, providing for a $59.5 million revolving credit facility, with an uncommitted accordion feature that, if exercised, will upsize the facility up to $150.0 million (the “2015 Revolving Credit Facility”).  On April 7, 2015, we entered into a guarantee of the obligations of the Subsidiaries under the 2015 Revolving Credit Facility, in favor of ABN AMRO Capital USA LLC.  Borrowings under the 2015 Revolving Credit Facility are to be secured by liens on each of the Subsidiaries’ respective vessels; specifically, the Genco Commodus, Genco Maximus, Genco Claudius, Genco Hunter and Genco Warrior and other related assets.  Should the accordion feature be exercised, the 2015 Revolving Credit Facility will also be secured by up to six additional Capesize vessels and two additional Supramax vessels owned by other subsidiaries of the Company and other related assets.
 
Borrowings under the 2015 Revolving Credit Facility have been used for general corporate purposes including “working capital” (as defined in the 2015 Revolving Credit Facility) and to finance the purchase of drybulk vessels.  The 2015 Revolving Credit Facility has a maturity date of March 31, 2020.  Borrowings under the 2015 Revolving Credit Facility bear interest at LIBOR plus a margin based on a combination of utilization levels under the 2015 Revolving Credit Facility and a security maintenance cover ranging from 3.40% per annum to 4.25% per annum.  The commitment under the 2015 Revolving Credit Facility is subject to quarterly reductions of $1,641 to $4,137 depending on the total amount committed.  Borrowings under the 2015 Revolving Credit Facility are subject to 20 equal consecutive quarterly installment repayments commencing three months after the date of the loan agreement, or July 7, 2015.  On April 8, 2015, we drew down $25.0 million on the 2015 Revolving Credit Facility for working capital purposes and to partially fund the purchase of the Baltic Lion and Baltic Tiger from Baltic Trading.  A commitment fee of 1.5% per annum is payable on the undrawn amount of the maximum loan amount.
 
On April 30, 2015, we entered into agreements to amend or waive certain provisions of the $100 Million Term Loan Agreement and the $253 Million Term Loan Facility.  Refer to Note 9 — Debt in our Condensed Consolidated Financial Statements for further information.
 
On December 31, 2014, Baltic Trading entered into a $148.0 million senior secured credit facility with Nordea Bank Finland plc, New York Branch (“Nordea”), as Administrative and Security Agent, Nordea and Skandinaviska Enskilda Banken AB (Publ) (“SEB”), as Mandated Lead Arrangers, Nordea, as Bookrunner, and the lenders (including Nordea and SEB) party thereto (the “Baltic Trading $148 Million Credit Facility”).  The Baltic Trading $148 Million Credit Facility is comprised of a $115.0 million revolving credit facility and $33.0 million term loan facility.  Borrowings under the revolving credit facility will be used to refinance Baltic Trading’s outstanding indebtedness under the 2010 Baltic Trading Credit Facility.  Amounts borrowed under the revolving credit facility of the Baltic Trading $148 Million Credit Facility may be re-borrowed.  Borrowings under the term loan facility of the Baltic Trading $148 Million Credit Facility may be incurred pursuant to two single term loans in an amount of $16.5 million each that will be used to finance, in part, the purchase of two newbuilding Ultramax vessels that Baltic Trading has agreed to acquire, namely the Baltic Scorpion and Baltic Mantis.  Amounts borrowed under the term loan facility of the Baltic Trading $148 Million Term Loan Facility may not be re-borrowed.
 
The Baltic Trading $148 Million Credit Facility has a maturity date of December 31, 2019.  Borrowings under this facility bear interest at LIBOR plus an applicable margin of 3.00% per annum.  A commitment fee of 1.2% per annum is payable on the unused daily portion of the Baltic Trading $148 Million Credit Facility, which began accruing on December 31, 2014.  The commitment under the revolving credit facility of the Baltic Trading $148 Million Term Loan Facility is subject to equal consecutive quarterly reductions of approximately $2.5 million each beginning June 30, 2015 through September 30, 2019.  Borrowings under the term loan facility of the Baltic Trading $148 Million Term Loan Facility are subject to equal consecutive quarterly installment repayments commencing three months after delivery of the relevant newbuilding Ultramax vessel, each in the amount of 1/60 th  of the aggregate outstanding term loan.  All remaining amounts outstanding under the Baltic Trading $148 Million Term Loan Facility must be repaid in full on the maturity date, December 31, 2019.  Refer to Note 9 — Debt in our Condensed Consolidated Financial Statements for additional information regarding the Baltic Trading $148 Million Credit Facility.
 
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On October 8, 2014, Baltic Trading and its wholly-owned subsidiaries, Baltic Hornet Limited and Baltic Wasp Limited, each entered into a loan agreement and related documentation for a credit facility in a principal amount of up to $16.8 million with ABN AMRO Capital USA LLC and its affiliates (the “2014 Baltic Trading Term Loan Facilities”) to partially finance the newbuilding Ultramax vessel that each subsidiary is to acquire, namely the Baltic Hornet and Baltic Wasp, respectively. Amounts borrowed may not be reborrowed. The 2014 Baltic Trading Term Loan Facilities have a ten-year term and is to be repaid in 20 equal consecutive semi-annual installments of 1/24 of the facility amount a balloon payment of 1/6 of the facility amount to be paid at final maturity. Principal repayments will commence six months after the actual delivery date for the vessel and borrowing bear interest at three or six-month LIBOR rate plus an applicable margin of 2.50%. Refer to Note 9 — Debt in our Condensed Consolidated Financial Statements for additional information regarding the 2014 Baltic Trading Term Loan Facilities. On October 24, 2014, Baltic Trading drew down $16.8 million for the purchase of the Baltic Hornet, which was delivered on October 29, 2014.  On December 30, 2014, Baltic Trading drew down $16.4 million for the purchase of the Baltic Wasp, which was delivered on January 2, 2015.
 
Dividends
 
Under the terms of the $253 Million Term Loan Facility and the $100 Million Term Loan Facility as amended in connection with the Prepack Plan, we were prohibited from paying dividends or repurchasing our stock through March 31, 2015. Moreover, we would make dividend payments to our shareholders only if our Board of Directors, acting in its sole discretion, determines that such payments would be in our best interest and in compliance with relevant legal and contractual requirements. The principal business factors that our Board of Directors would consider when determining the timing and amount of dividend payments would be our earnings, financial condition and cash requirements at the time. Marshall Islands law generally prohibits the declaration and payment of dividends other than from surplus. Marshall Islands law also prohibits the declaration and payment of dividends while a company is insolvent or would be rendered insolvent by the payment of such a dividend.
 
Cash Flow
 
Net cash used in operating activities for the three months ended March 31, 2015 and 2014 was $12.3 million and $2.6 million, respectively.  Excluding the non-cash impairment of vessel assets of $35.4 million, we recorded a net loss in the amount of $43.7 million for the three months ended March 31, 2015 compared to a net loss of $42.2 million for the three months ended March 31, 2014.  The increase in cash used by operating activities was primarily due to a decrease in depreciation and amortization expense of $16.8 million as a result of the adoption of fresh-start reporting on the Effective Date which required us to revalue our vessel assets at market partially offset by the increase in the size of our fleet due to the delivery of two Baltic Trading vessels during the fourth quarter of 2014 and the first quarter of 2015.  Additionally, the fluctuation in accounts payable and accrued expenses decreased by $5.4 million due to restructuring related expenses incurred during the first quarter of 2014.  These decreases in net cash used in operating activities were partially offset by an $11.0 million increase in the amortization of nonvested stock compensation due to the amortization of the MIP Warrants and restricted shares issued after the Effective Date by the Successor Company.  Lastly, the decrease in net cash used in operating activities was also partially offset by a decrease in deferred drydocking costs incurred of $2.1 million during the first quarter of 2015 as compared to the first quarter of 2014 as a total of five vessels, including one of Baltic Trading vessels, completed drydocking during the first quarter of 2015 as compared to a total of ten vessels that completed drydocking during the first quarter of 2014, which included three of Baltic Trading’s vessels.
 
Net cash used in investing activities for the three months ended March 31, 2015 and 2014 was $4.5 million and $17.9 million, respectively.  Net cash used in investing activities for the three months ended March 31, 2015 consisted primarily of $24.1 million of vessel asset purchases, including deposits.  This consisted primarily of deposits made by Baltic Trading for its three remaining newbuilding vessels that it has agreed to acquire, one of which was delivered during the first quarter of 2015.  Additionally, there was a $19.8 million fluctuation of the change in deposits of restricted cash primarily related to the $19.6 million of restricted cash that was held in an escrow account as of December 31, 2014 for the purchase of the Baltic Wasp which was released to the shipyard upon the vessel delivery on January 2, 2015.  For the three month ended March 31, 2014, cash used in investing activities consisted primarily of $17.6 million of vessel asset purchases, including deposits which consisted primarily of deposits made by Baltic Trading for the four newbuilding vessels that it has agreed to acquire which were not yet delivered as of March 31, 2014.
 
Net cash provided by financing activities was $2.2 million during the three months ended March 31, 2015 as compared to net cash used in financing activities of $9.8 million during the three months ended March 31, 2014.  Net cash provided by financing activities for the three months ended March 31, 2015 consisted primarily of $115.0 million of proceeds from the Baltic Trading $148 Million Credit Facility partially offset by the following: $102.3 million repayment of debt under the 2010 Baltic Trading Credit Facility, $5.3 million repayment of debt under the $253 Million Term Loan Facility, $1.9 million repayment of debt under the $100 Million Term Loan Facility, $0.7 million repayment of debt under the Baltic Trading $44 Million Term Loan Facility, $0.4 million repayment of debt under the Baltic Trading $22 Million Term Loan Facility and $2.2 million payment of deferred financing costs.   Net cash used in financing activities for the three months ended March 31, 2014 consisted primarily of the following:  $5.1 million repayment of debt
 
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under the $253 Million Term Loan Facility, $1.9 million repayment of debt under the $100 Million Term Loan Facility, $0.7 million repayment of debt under the Baltic Trading $44 Million Term Loan Facility, $0.4 million repayment of debt under the Baltic Trading $22 Million Term Loan Facility and $1.5 million of dividends paid by Baltic Trading to its outside shareholders.   There were no dividends paid by Baltic Trading during the three months ended March 31, 2015.
 
Credit Facilities
 
Refer to the 2014 10-K, as amended, for a summary and description of our outstanding credit facilities, including the underlying financial and non-financial covenants.  On October 8, 2014, wholly-owned subsidiaries of Baltic Trading entered into the 2014 Baltic Trading Term Loan Facilities to fund a portion of the purchase of the Baltic Hornet and Baltic Wasp. Additionally, on December 31, 2014, Baltic Trading entered into the Baltic Trading $148 Million Credit Facility which is comprised of a $115.0 million revolving credit facility and $33.0 million term loan facility to fund or refund a portion of the purchase of the Baltic Scorpion and Baltic Mantis. Borrowings under the Baltic Trading $148 Million Credit Facility were used to refinance Baltic Trading’s indebtedness under the 2010 Baltic Trading Credit Facility.  On April 7, 2015, five of our wholly-owned subsidiaries entered into 2015 Revolving Credit Facility which provides for a $59.5 million revolving credit facility with an uncommitted accordion feature that, if exercised, will upsize the facility up to $150.0 million. Lastly, on April 30, 2015, we entered into agreements to amend or waive certain provisions of the $100 Million Term Loan Agreement and the $253 Million Term Loan Facility. Refer to Note 9 —Debt in our Condensed Consolidated Financial Statements for further information regarding the terms and fees associated with these agreements.
 
On July 2, 2014, the Bankruptcy Court entered the Confirmation Order, confirming the Plan. On July 9, 2014 (the “Effective
Date”), we completed our financial restructuring and emerged from Chapter 11 through a series of transactions contemplated by the Plan, and the Plan became effective pursuant to its terms.
 
Key components of the Plan regarding the credit facilities and the 2010 Notes included:
 
·                   The conversion of 100% of the Claims under the 2007 Credit Facility into 81.1% of the New Genco Common Stock (subject to dilution by the warrants issued under the Plan). On the Effective Date, the 2007 Credit Facility was terminated, and the liens and mortgages thereunder were released. Refer to Note 9 — Debt in our Condensed Consolidated Balance Sheet for further information.
 
·                   The conversion of 100% of the Claims under the 2010 Notes into 8.4% of the New Genco Common Stock (subject to dilution by the warrants issued under the Plan). On the Effective Date, the 2010 Notes and the Indenture were fully satisfied and discharged. Refer to Note 10 — Convertible Senior Notes in our Condensed Consolidated Financial Statements for further information.
 
·                   T he amendment and restatement of the $253 Million Term Loan Facility and the $100 Million Term Loan Facility as of the Effective Date, with extended maturities, a financial covenant holiday and certain other amendments, as discussed further in Note 9 — Debt in our Condensed Consolidated Financial Statements.
 
As of March 31, 2015, we believe we were in compliance with all of the financial covenants under the $253 Million Term Loan Facility; the $100 Million Term Loan Facility; the Baltic Trading $148 Million Credit Facility; the Baltic Trading $22 Million Term Loan Facility; the Baltic Trading $44 Million Term Loan Facility and the 2014 Baltic Trading Term Loan Facilities.
 
Convertible Notes Payable
 
Refer to Note 10 — Convertible Senior Notes of our Condensed Consolidated Financial Statements for a summary of the convertible notes payable.  On the Effective Date when the Company emerged from Chapter 11, the 2010 Notes and the Indenture were fully satisfied and discharged.
 
Interest Rate Swap Agreements, Forward Freight Agreements and Currency Swap Agreements
 
At March 31, 2015 and December 31, 2014, we did not have any interest rate swap agreements.  As part of our business strategy, we may enter into interest rate swap agreements to manage interest costs and the risk associated with changing interest rates.  In determining the fair value of interest rate derivatives, we would consider the creditworthiness of both the counterparty and ourselves immaterial. Valuations prior to any adjustments for credit risk would be validated by comparison with counterparty valuations.  Amounts would not and should not be identical due to the different modeling assumptions.  Any material differences would be investigated.
 
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Refer to Note 11 — Interest Rate Swap Agreements of our Condensed Consolidated Financial Statements, which discusses the interest rate swap agreement that were in place prior to the Effective Date.
 
As part of our business strategy, we may enter into arrangements commonly known as forward freight agreements, or FFAs, to hedge and manage market risks relating to the deployment of our existing fleet of vessels.  These arrangements may include future contracts, or commitments to perform in the future a shipping service between ship owners, charterers and traders.  Generally, these arrangements would bind us and each counterparty in the arrangement to buy or sell a specified tonnage freighting commitment “forward” at an agreed time and price and for a particular route.  Although FFAs can be entered into for a variety of purposes, including for hedging, as an option, for trading or for arbitrage, if we decided to enter into FFAs, our objective would be to hedge and manage market risks as part of our commercial management. It is not currently our intention to enter into FFAs to generate a stream of income independent of the revenues we derive from the operation of our fleet of vessels.  If we determine to enter into FFAs, we may reduce our exposure to any declines in our results from operations due to weak market conditions or downturns, but may also limit our ability to benefit economically during periods of strong demand in the market.  We have not entered into any FFAs as of March 31, 2015 and December 31, 2014.
 
Contractual Obligations
 
The following table sets forth our contractual obligations and their maturity dates as of March 31, 2015.  The table incorporates the employment agreement entered into in September 2007 with our President, John Wobensmith.  The table reflects Baltic Trading’s agreements to acquire the remaining two newbuilding Ultramax drybulk vessels from Yangfan Group Co., Ltd. for an aggregate purchase price of $56.0 million.  Baltic Trading plans to finance these vessel acquisitions with a combination of cash on hand, future cash flow from operations, as well as debt or equity financing, including the Baltic Trading $148 Million Credit Facility as discussed above under “Liquidity and Capital Resources.”   The interest and borrowing fees and credit agreement payments below reflect the $100 Million Term Loan Facility, the $253 Million Term Loan Facility, the Baltic Trading $22 Million Term Loan Facility, the Baltic Trading $44 Million Term Loan Facility, the 2014 Baltic Trading Term Loan Facilities and the Baltic Trading $148 Million Credit Facility, as well as other fees associated with the facilities.  Additionally, the interest and borrowing fees and credit agreement payments below reflect the unused fees, interest expense, upfront fees of $1.1 million and credit facility repayments related to the 2015 Revolving Credit Facility which was entered on April 7, 2015.  The interest and borrowing fees below also include the $0.5 million of upfront fees related to the amendments entered into on April 30, 2015 for the $100 Million Term Loan Facility and $253 Million Term Loan Facility.  Refer to Note 9 — Debt in our Condensed Consolidated Financial Statements for further information regarding the terms of the aforementioned credit facilities.  The following table also incorporates the future lease payments associated with the lease for our current space and excludes the lease from our former space as we have filed a motion to reject the lease for our former space in the bankruptcy proceedings, which was accepted on the Effective Date upon our emergence from Chapter 11.  Refer to Note 20 — Commitments and Contingencies in our Condensed Consolidated Financial Statements for further information regarding the terms of our two lease agreements.

 	 	Total	 	Less than One
Year (1)	 	One to Three
Years	 	Three to Five
Years	 	More than
Five Years	 	
 	 	(U.S. dollars in thousands)	 	
Credit Agreements	 	$	459,609	 	$	33,388	 	$	89,585	 	$	291,617	 	$	45,019	 	
Interest and borrowing fees	 	64,957	 	14,125	 	28,609	 	20,170	 	2,053	 	
Remainder of purchase price of vessels (2)	 	39,200	 	39,200	 	—	 	—	 	—	 	
Executive employment agreement	 	292	 	292	 	—	 	—	 	—	 	
Office leases	 	19,449	 	791	 	2,152	 	3,146	 	13,360	 	
Totals	 	$	583,507	 	$	87,796	 	$	120,346	 	$	314,933	 	$	60,432	 	

(1)          Represents the nine-month period ending December 31, 2015.
(2)          The timing of this obligation is based on the estimated delivery dates for the Baltic Scorpion and Baltic Mantis.
 
Interest expense has been estimated using 0.28% plus the applicable margin of 3.50% for the $100 Million Term Loan Facility and the $253 Million Term Loan Facility and 3.40% for the 2015 Revolving Credit Facility.  For the Baltic Trading $22 Million Term Loan Facility and the Baltic Trading $44 Million Term Loan Facility, interest expense has been estimated using 0.28% plus the applicable margin of 3.35%.  Interest expense has been estimated using 0.28% plus the applicable margin for the Baltic Trading $148 Million Credit Facility and for the 2014 Baltic Trading Term Loan Facilities of 3.00% and 2.50%, respectively.
 
Capital Expenditures
 
We make capital expenditures from time to time in connection with our vessel acquisitions.  Excluding Baltic Trading’s vessels, our fleet currently consists of 11 Capesize drybulk carriers, eight Panamax drybulk carriers, 17 Supramax drybulk carriers, six
 
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Handymax drybulk carriers and 13 Handysize drybulk carriers.  Baltic Trading’s fleet currently consists of two Capesize drybulk carriers, two Ultramax drybulk carriers, four Supramax drybulk carriers and five Handysize drybulk carriers.  After the expected delivery of the remaining two Ultramax vessels that Baltic Trading has agreed to acquire, Baltic Trading’s fleet will consists of two Capesize drybulk carriers, four Ultramax drybulk carriers, four Supramax drybulk carriers and five Handysize drybulk carriers. Baltic Trading intends to use a combination of cash on hand, future cash flow from operations as well as debt or equity financing, including the Baltic Trading $148 Million Credit Facility, to fully finance the acquisition of the remaining two Ultramax newbuilding drybulk vessels.
 
As previously announced, we have initiated a fuel efficiency upgrade program for certain of our vessels. We believe this program will generate considerable fuel savings going forward and increase the future earnings potential for these vessels. The cost of the upgrades, which will be performed under the planned drydocking schedule, is expected to be approximately $0.3 million for a Supramax vessel and $0.5 million for a Capesize vessel and is included in GS&T and Baltic Trading’s estimated drydocking costs below. Additionally, during the remainder of 2015, we expect these upgrades to be installed on two of GS&T’s Supramax vessels and two of Baltic Trading’s Capesize vessels. During 2016, we also expect these upgrades to be installed on one of GS&T’s Supramax vessels.  During the first quarter of 2015, the upgrades have been successfully installed on two of our vessels, the Genco Bourgogne and Genco Brittany.  Additionally, the upgrades have been successfully installed on four of our vessels, the Genco Aquitaine, Genco Ardennes, Genco Auvergne and Genco Titus, which completed their planned drydockings during the third and fourth quarter of 2014. Lastly, the upgrades have been successfully installed on five of Baltic Trading’s vessels, the Baltic Cougar, the Baltic Panther, the Baltic Leopard, the Baltic Jaguar and the Baltic Wind, which completed their planned drydockings during the first half of 2014.
 
Under U.S. Federal law and 33 CFR, Part 151, Subpart D, U.S. approved ballast water treatment systems will be required to be installed in all vessels at the first out of water drydocking after January 1, 2016 if these vessels are to discharge ballast water inside 12 nautical miles of the coast of the United States. Currently, we do not believe there are any ballast water treatment systems that are approved by U.S. authorities; however, an alternative management system (“AMS”) may be installed in lieu.  For example, in February 2015, the USCG added Bawat to the list of ballast water treatment systems that received AMS acceptance.  An AMS is valid for five years from the date of required compliance with ballast water discharge standards, by which time it must be replaced by an approved system unless the AMS itself achieves approval. The cost of these systems will vary based on the size the vessel, and the Company estimates the cost of the systems to be $1.0 million for Capesize, $0.8 million for Panamax, $0.8 million for Supramax, $0.7 million for Handymax and $0.7 million for Handysize vessels. Any newbuilding vessels that we acquire will have an AMS installed when the vessel is being built. The costs ofballast water treatment systems will be capitalized and depreciated over the remainder of the life of the vessel, assuming the system the Company installs becomes approved. These amounts would be in addition to the amounts budgeted for drydocking below.
 
Genco Shipping & Trading Limited
 
In addition to acquisitions that we may undertake in future periods, we will incur additional expenditures due to special surveys and drydockings for our fleet. We estimate our drydocking costs, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, and scheduled off-hire days for our fleet, excluding Baltic Trading’s vessels, through 2016 to be:

Year	 	Estimated Drydocking Cost	 	Estimated Off-hire Days	 	
 	 	(U.S. dollars in millions)	 	 	 	
 	 	 	 	 	 	
2015 (April 1- December 31, 2015)	 	$	9.3	 	260	 	
2016	 	$	10.0	 	310	 	
 
The costs reflected are estimates based on drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed.  We expect to fund these costs with cash from operations.  These costs do not include drydock expense items that are reflected in vessel operating expenses, including the write-off of any steel that is replaced during drydocking.  Additionally, these costs do not include the cost of ballast water treatment systems as noted above.
 
We estimate that each drydock will result in 20 days of off-hire.  Actual length will vary based on the condition of the vessel, yard schedules and other factors.  Higher repairs and maintenance expense during drydocking for vessels which are over 15 years old typically result in a higher number of off-hire days depending on the condition of the vessel.
 
During the three months ended March 31, 2015 and 2014, we incurred a total of $3.0 million and $4.0 million of drydocking costs, respectively, excluding costs incurred during drydocking that were capitalized to vessel assets or vessel equipment.
 
Four of our vessels completed their drydockings during the first quarter of 2015, including the Genco Bourgogne, which entered the drydocking yard during the fourth quarter of 2014.  Additionally, the Genco Picardy entered the drydocking yard during the first quarter of 2015, but did not complete its drydocking until the second quarter of 2015. We estimate that ten of our vessels will
 
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be drydocked during the remainder of 2015 (excluding the Genco Picardy) and an additional 13 of our vessels will be drydocked during 2016.
 
Baltic Trading Limited
 
In addition to acquisitions that Baltic Trading may undertake in future periods, Baltic Trading will incur additional capital expenditures due to special surveys and drydockings for its fleet. We estimate our drydocking costs, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, and scheduled off-hire days for Baltic Trading’s fleet through 2016 to be:

Year	 	Estimated Drydocking Cost	 	Estimated Off-hire Days	 	
 	 	(U.S. dollars in millions)	 	 	 	
 	 	 	 	 	 	
2015 (April 1 - December 31, 2015)	 	$	4.0	 	80	 	
2016	 	$	—	 	—	 	
 
The costs reflected are estimates based on drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed.  We expect to fund these costs with cash from operations.  These costs do not include drydock expense items that are reflected in vessel operating expenses, including the write-off of any steel that is replaced during drydocking.  Additionally, these costs do not include the cost of ballast water treatment systems as noted above.
 
We estimate that each drydock will result in 20 days of off-hire.  Actual length will vary based on the condition of the vessel, yard schedules and other factors.  Higher repairs and maintenance expenses during drydocking for vessels which are over 15 years old typically result in a higher number of off-hire days depending on the condition of the vessel.
 
During the three months ended March 31, 2015 and 2014, Baltic Trading incurred a total of of $0.5 million and $1.7 million of drydocking costs, respectively, excluding costs incurred during drydocking that were capitalized to vessels assets or vessel equipment.
 
One of Baltic Trading’s vessels was drydocked during the first quarter of 2015.  We estimated that four of Baltic Trading’s vessels will be drydocked during the remainder of 2015 and none of Baltic Trading’s vessels will be drydocked during 2016.
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
 
Inflation
 
Inflation has only a moderate effect on our expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, general and administrative, and financing costs.
 
CRITICAL ACCOUNTING POLICIES
 
There have been no changes or updates to the critical accounting policies as disclosed in the 2014 10-K, as amended.
 
Vessels and Depreciation
 
We record the value of our vessels at their cost (which includes acquisition costs directly attributable to the vessel and expenditures made to prepare the vessel for its initial voyage) less accumulated depreciation.  We depreciate our drybulk vessels on a straight-line basis over their estimated useful lives, estimated to be 25 years from the date of initial delivery from the shipyard.  Depreciation is based on cost less the estimated residual scrap value.  Effective July 9, 2014, the Effective Date, we increased the estimated scrap value of the vessels from $245/lwt to $310/lwt prospectively based on the 15-year average scrap value of steel.  This increase in the residual value of the vessels will decrease the annual depreciation charge over the remaining useful life of the vessels.  During the three months ended March 31, 2015, the increase in the estimated scrap value resulted in a decrease in depreciation expense of approximately $0.8 million for the Successor Company.  Similarly, an increase in the useful life of a drybulk vessel would also decrease the annual depreciation charge.  Comparatively, a decrease in the useful life of a drybulk vessel or in its residual value would have the effect of increasing the annual depreciation charge.  However, when regulations place limitations over the ability of a
 
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vessel to trade on a worldwide basis, we will adjust the vessel’s useful life to end at the date such regulations preclude such vessel’s further commercial use.
 
The carrying value of each of our vessels does not represent the fair market value of such vessel or the amount we could obtain if we were to sell any of our vessels, which could be more or less.  U nder U.S. GAAP, we would not record a loss if the fair market value of a vessel (excluding its charter) is below our carrying value unless and until we determine to sell that vessel or the vessel is impaired as discussed in the 2014 10-K, as amended.  Excluding the three Bourbon vessels we resold immediately upon delivery to MEP at our cost, we have sold three of our vessels since our inception and realized a profit in each instance.  However, we did determine to cancel an acquisition of six drybulk newbuildings in November 2008, incurring a $53.8 million loss from the forfeiture of our deposit and related interest.  At March 31, 2015, we determined that the sale of the Baltic Lion and Baltic Tiger was probably based on Baltic Trading’s expressed consideration to divest of those vessels to increase its liquidity position and strengthen our balance sheet.  Therefore, the time utilized to determine the recoverability of the carrying value of the vessel assets was significantly reduced, and after determining that the sum of the estimated undiscounted future cash flows attributable to the Baltic Lion and Baltic Tiger would not exceed the carrying value of the respective vessels, the Company reduced the carrying value of each vessel to its fair market value.  On April 7, 2015, we entered into an agreement with Baltic Trading to purchase the Baltic Lion and Baltic Tiger for an aggregate purchase price of $68.5 million, not including commission.  During the three months ended March 31, 2015, we have recorded an impairment loss related to these vessel assets of $35.4 million as it was determined that the estimated undiscounted future cash flows attributable to these vessels would not exceed the carrying value.  Refer to Note 2 — Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements for further information.
 
Pursuant to our bank credit facilities, we regularly submit to the lenders valuations of our vessels on an individual charter free basis in order to evidence our compliance with the collateral maintenance covenants under our bank credit facilities.  Such a valuation is not necessarily the same as the amount any vessel may bring upon sale, which may be more or less, and should not be relied upon as such.  We were in compliance with the collateral maintenance covenants under our $100 Million Term Loan Facility, as amended; the $253 Million Term Loan Facility, as amended; the Baltic Trading $148 Million Credit Facility; the Baltic Trading $22 Million Term Loan Facility; the Baltic Trading $44 Million Term Loan Facility; and the 2014 Baltic Trading Term Loan Facilities at March 31, 2015.  We obtained valuations for all of the vessels in our fleet, including Baltic Trading, as of December 31, 2014 pursuant to the terms of the credit facilities, with the exception of the $100 Million Term Loan Facility which we utilized the February 4, 2015 valuations pursuant to the terms of the credit facility.  In the chart below, we list each of our vessels, the year it was built, the year we acquired it, and its carrying value at March 31, 2015 and December 31, 2014.  Please note that the carrying value of the Baltic Lion and Baltic Tiger at March 31, 2015 reflects the impairment loss recorded for these vessels.
 
At March 31, 2015, the vessel valuations of all of our vessels for covenant compliance purposes under our bank credit facilities as of the most recent compliance testing date, with the exception of the Baltic Lion and Baltic Tiger, were lower than their carrying values at March 31, 2015.  At December 31, 2014, the vessel valuations of all of our vessels for covenant compliance purposes under our bank credit facilities as of the most recent compliance testing date, with the exception of the Genco Avra, Genco Mare and Genco Spirit, were lower than their carrying values at December 31, 2014.  For the Genco Ocean, Genco Bay, Genco Avra, Genco Mare and Genco Spirit, the last compliance testing date prior to March 31, 2015 and December 31, 2014 was February 4, 2015 and August 18, 2014, respectively, in accordance with the terms of the $100 Million Term Loan Facility; for all other vessels, the compliance testing date was December 31, 2014 in accordance with the terms of the applicable credit facility.
 
The amount by which the carrying value at March 31, 2015 of all of the vessels in our fleet, with the exception of the Baltic Lion and Baltic Tiger, exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $0.6 million to $7.8 million per vessel, and $243.5 million on an aggregate fleet basis.  The amount by which the carrying value at December 31, 2014 of all of the vessels in our fleet, with the exception of the Genco Avra, Genco Mare and Genco Spirit, exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $0.1 million to $8.2 million per vessel, and $246.6 million on an aggregate fleet basis.  The average amount by which the carrying value of our vessels exceeded the valuation of such vessels for covenant compliance purposes was $3.7 million at March 31, 2015 and $3.9 million as of December 31, 2014.  However, neither such valuation nor the carrying value in the table below reflects the value of long-term time charters related to some of our vessels.

 	 	 	 	 	 	Carrying Value (U.S.
dollars in
thousands) as of	 	
Vessels	 	Year Built	 	Year
Acquired	 	March 31,
2015	 	December
31, 2014	 	
Unencumbered	 	 	 	 	 	 	 	 	 	
Genco Reliance	 	1999	 	2004	 	$	9,189	 	$	9,379	 	
Genco Vigour	 	1999	 	2004	 	11,842	 	12,064	 	
Genco Explorer	 	1999	 	2004	 	9,171	 	9,367	 	

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 	 	 	 	 	 	Carrying Value (U.S.
dollars in
thousands) as of	 	
Vessels	 	Year Built	 	Year
Acquired	 	March 31,
2015	 	December
31, 2014	 	
Genco Carrier	 	1998	 	2004	 	10,933	 	11,209	 	
Genco Sugar	 	1998	 	2004	 	8,312	 	8,502	 	
Genco Pioneer	 	1999	 	2005	 	9,149	 	9,352	 	
Genco Progress	 	1999	 	2005	 	9,167	 	9,364	 	
Genco Wisdom	 	1997	 	2005	 	10,088	 	10,354	 	
Genco Success	 	1997	 	2005	 	10,063	 	10,338	 	
Genco Beauty	 	1999	 	2005	 	11,836	 	12,061	 	
Genco Knight	 	1999	 	2005	 	11,809	 	12,043	 	
Genco Leader	 	1999	 	2005	 	11,804	 	12,039	 	
Genco Marine	 	1996	 	2005	 	9,075	 	9,346	 	
Genco Prosperity	 	1997	 	2005	 	10,085	 	10,356	 	
Genco Muse	 	2001	 	2005	 	14,357	 	14,617	 	
Genco Acheron	 	1999	 	2006	 	11,787	 	12,028	 	
Genco Surprise	 	1998	 	2006	 	10,831	 	11,058	 	
Genco Augustus	 	2007	 	2007	 	41,255	 	41,761	 	
Genco Tiberius	 	2007	 	2007	 	41,258	 	41,763	 	
Genco London	 	2007	 	2007	 	39,790	 	40,242	 	
Genco Titus	 	2007	 	2007	 	40,149	 	40,603	 	
Genco Challenger	 	2003	 	2007	 	12,647	 	12,851	 	
Genco Charger	 	2005	 	2007	 	14,577	 	14,726	 	
Genco Warrior	 	2005	 	2007	 	20,068	 	20,348	 	
Genco Predator	 	2005	 	2007	 	20,062	 	20,349	 	
Genco Hunter	 	2007	 	2007	 	22,433	 	22,710	 	
Genco Champion	 	2006	 	2008	 	15,498	 	15,710	 	
Genco Constantine	 	2008	 	2008	 	43,626	 	44,133	 	
Genco Raptor	 	2007	 	2008	 	19,573	 	19,802	 	
Genco Cavalier	 	2007	 	2008	 	18,474	 	18,694	 	
Genco Thunder	 	2007	 	2008	 	19,585	 	19,810	 	
Genco Hadrian	 	2008	 	2008	 	43,120	 	43,587	 	
Genco Commodus	 	2009	 	2009	 	45,575	 	46,057	 	
Genco Maximus	 	2009	 	2009	 	45,586	 	46,065	 	
Genco Claudius	 	2010	 	2009	 	47,784	 	48,275	 	
TOTAL	 	 	 	 	 	$	730,558	 	$	740,963	 	
 	 	 	 	 	 	 	 	 	 	
$100 Million Term Loan Facility	 	 	 	 	 	 	 	 	 	
Genco Bay	 	2010	 	2010	 	20,603	 	20,822	 	
Genco Ocean	 	2010	 	2010	 	20,614	 	20,829	 	
Genco Avra	 	2011	 	2011	 	21,724	 	21,945	 	
Genco Mare	 	2011	 	2011	 	21,730	 	21,948	 	
Genco Spirit	 	2011	 	2011	 	21,739	 	21,954	 	
TOTAL	 	 	 	 	 	$	106,410	 	$	107,498	 	
 	 	 	 	 	 	 	 	 	 	
$253 Million Term Loan Facility	 	 	 	 	 	 	 	 	 	
Genco Aquitaine	 	2009	 	2010	 	20,742	 	20,963	 	
Genco Ardennes	 	2009	 	2010	 	20,747	 	20,967	 	
Genco Auvergne	 	2009	 	2010	 	20,936	 	21,157	 	
Genco Bourgogne	 	2010	 	2010	 	21,915	 	22,110	 	
Genco Brittany	 	2010	 	2010	 	21,913	 	21,966	 	
Genco Languedoc	 	2010	 	2010	 	21,896	 	21,967	 	
Genco Loire	 	2009	 	2010	 	20,101	 	20,321	 	
Genco Lorraine	 	2009	 	2010	 	20,098	 	20,320	 	
Genco Normandy	 	2007	 	2010	 	18,486	 	18,702	 	
Genco Picardy	 	2005	 	2010	 	20,038	 	20,321	 	
Genco Provence	 	2004	 	2010	 	18,935	 	19,211	 	
Genco Pyrenees	 	2010	 	2010	 	21,869	 	21,971	 	
 
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 	 	 	 	 	 	Carrying Value (U.S.
dollars in
thousands) as of	 	
Vessels	 	Year Built	 	Year
Acquired	 	March 31,
2015	 	December
31, 2014	 	
Genco Rhone	 	2011	 	2011	 	22,826	 	23,054	 	
TOTAL	 	 	 	 	 	$	270,502	 	$	273,030	 	
 	 	 	 	 	 	 	 	 	 	
Baltic Trading $148 Million Credit Facility	 	 	 	 	 	 	 	 	 	
Baltic Leopard	 	2009	 	2009	 	20,108	 	20,325	 	
Baltic Panther	 	2009	 	2010	 	20,110	 	20,327	 	
Baltic Cougar	 	2009	 	2010	 	20,113	 	20,329	 	
Baltic Jaguar	 	2009	 	2010	 	20,116	 	20,330	 	
Baltic Bear	 	2010	 	2010	 	46,999	 	47,251	 	
Baltic Wolf	 	2010	 	2010	 	46,742	 	47,210	 	
Baltic Wind	 	2009	 	2010	 	19,617	 	19,831	 	
Baltic Cove	 	2010	 	2010	 	20,606	 	20,824	 	
Baltic Breeze	 	2010	 	2010	 	20,620	 	20,833	 	
TOTAL	 	 	 	 	 	$	235,031	 	$	237,260	 	
 	 	 	 	 	 	 	 	 	 	
Baltic Trading $22 Million Term Loan Facility	 	 	 	 	 	 	 	 	 	
Baltic Fox	 	2010	 	2013	 	20,233	 	20,444	 	
Baltic Hare	 	2009	 	2013	 	19,117	 	19,331	 	
TOTAL	 	 	 	 	 	$	39,350	 	$	39,775	 	
 	 	 	 	 	 	 	 	 	 	
Baltic Trading $44 Million Term Loan Facility	 	 	 	 	 	 	 	 	 	
Baltic Lion	 	2009	 	2013	 	35,661	 	53,659	 	
Baltic Tiger	 	2010	 	2013	 	33,149	 	51,541	 	
TOTAL	 	 	 	 	 	$	68,810	 	$	105,200	 	
 	 	 	 	 	 	 	 	 	 	
2014 Baltic Trading Term Loan Facilities	 	 	 	 	 	 	 	 	 	
Baltic Hornet	 	2014	 	2014	 	28,975	 	29,117	 	
Baltic Wasp	 	2015	 	2015	 	29,249	 	—	 	
TOTAL	 	 	 	 	 	$	58,224	 	$	29,117	 	
 	 	 	 	 	 	 	 	 	 	
Consolidated Total	 	 	 	 	 	$	1,508,855	 	$	1,532,843	 	
 
If we were to sell a vessel or hold a vessel for sale, and the carrying value of the vessel were to exceed its fair market value, we would record a loss in the amount of the difference.
 
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ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
 
Interest rate risk
 
We are exposed to the impact of interest rate changes.  Our objective is to manage the impact of interest rate changes on our earnings and cash flow in relation to our borrowings.  Prior to the filing of our Chapter 11 cases on the Petition Date, on March 31, 2014, we held one interest rate swap agreement with DnB Bank ASA to manage future interest costs and the risk associated with changing interest rates .  The swap agreement synthetically converted variable rate debt to fixed rate debt at the fixed interest rate of the swap plus the applicable margin of 3.00%.  The total notional principal amount of the remaining swap was $106.2 million and the swap had a specified rate and duration.  As of March 31, 2015 and December 31, 2014, we had no interest rate swap agreements in place.  Refer to the table in Note 11 — Interest Rate Swap Agreements in our Condensed Consolidated Financial Statements.
 
As of March 31, 2014, we were in default under covenants of our 2007 Credit Facility due to the default on the scheduled debt amortization payment due on March 31, 2014. The default under the 2007 Credit Facility required us to elect interest periods of only one-month, therefore we no longer qualified for hedge accounting under the original designation and hedge accounting was terminated effective March 31, 2014. Additionally, the filing of the Chapter 11 Cases on the Petition Date constituted an event of default with respect to the outstanding interest rate swap with DNB Bank ASA. As a result, DNB Bank ASA terminated all transactions under the remaining swap agreement effective April 30, 2014 and issued a secured claim with the Bankruptcy Court of $5.6 million. The interest rate swap was settled on the Effective Date upon our emergence from bankruptcy. This liability was paid by the Successor Company during the period from July 9 to December 31, 2014.
 
The interest rate swap that was terminated April 30, 2014 as mentioned above was not hedged as cash flow hedge accounting was discontinued beginning on March 31, 2014 as a result of the default under the 2007 Credit Facility (see above). Once cash flow hedge accounting was discontinued, the changes in the fair value of the interest rate swaps were recorded in the Condensed Consolidated Statement of Operations in Interest expense and the remaining amounts included in AOCI were amortized to interest expense over the original term of the hedging relationship. There was no hedge ineffectiveness associated with the interest rate swaps during the three months ended March 31, 2014.
 
We are subject to market risks relating to changes in LIBOR rates because we have significant amounts of floating rate debt outstanding.  For the 2007 Credit Facility, which was terminated on the Effective Date pursuant to the Plan, we were subject to a facility fee of 1.00% per annum on the average daily outstanding principal amount of the outstanding loan under the 2007 Credit Facility and we paid LIBOR plus 3.00% on the outstanding debt under this facility prior to its termination.   Additionally, during the period from January 1 to July 9, 2014, the Effective Date, we paid LIBOR plus 3.00% on the outstanding debt under the $100 Million Term Loan Facility and $253 Million Term Loan Facility. Pursuant to the amendments to these facilities which were effective on the Effective Date of the Plan, the margin was increased from 3.00% to 3.50% effective July 9, 2014. We also paid LIBOR plus 3.00% on the outstanding debt under the 2010 Baltic Trading Credit Facility until January 7, 2015 when the facility was refinanced with the Baltic Trading $148 Million Credit Facility.  Beginning on July 7, 2015, we paid LIBOR plus 3.00% on the outstanding debt under the Baltic Trading $148 Million Credit Facility as well.  Additionally, we paid the three-month LIBOR plus 3.35% on the outstanding debt under the Baltic Trading $22 Million Term Loan Facility and the Baltic Trading $44 Million Term Loan Facility. Lastly, we paid three-month LIBOR plus 2.50% on the outstanding debt under the 2014 Baltic Trading Term Loan Facilities. A 1% increase in LIBOR would result in an increase of $1.0 million in interest expense for the three months ended March 31, 2015. For any unpaid loan payments due under the $100 Million Term Loan Facility and the $253 Million Term Loan Facility during the bankruptcy period in 2014, we incurred an additional 2.00% default interest only on the unpaid loan amounts due during the bankruptcy period.
 
Derivative financial instruments
 
As of March 31, 2014, we were in default under covenants of our 2007 Credit Facility due to the default on the scheduled debt amortization payment due on March 31, 2014. The default under the 2007 Credit Facility required us to elect interest periods of only one month. Therefore, we no longer qualified for hedge accounting under the original designation and hedge accounting was terminated effective March 31, 2014. Additionally, the filing of the Chapter 11 Cases on the Petition Date constituted an event of default with respect to the outstanding interest rate swap with DNB Bank ASA. As a result, DNB Bank ASA terminated all transactions under the remaining swap agreement effective April 30, 2014 and made a secured claim with the Bankruptcy Court of $5.6 million. The interest rate swap was settled on the Effective Date upon our emergence from bankruptcy. This liability was paid by the Successor Company during the period from July 9 to December 31, 2014. Refer to Note 11 — Interest Rate Swap Agreements in our Condensed Consolidated Financial Statements for additional information.
 
As of March 31, 2015 and December 31, 2014, we did not have any interest rate swap agreements to manage interest costs and the risk associated with changing interest rates.
 
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The differential to be paid or received for the swap agreements that we previously had were recognized as an adjustment to interest expense as incurred.  The interest rate differential pertaining to the interest rate swaps for the three months ended March 31, 2014 was $1.4 million.  The Company was utilizing cash flow hedge accounting for the swaps whereby the effective portion of the change in value of the swaps is reflected as a component of AOCI.  The ineffective portion was recognized as other (expense) income, which is a component of other (expense) income.  If for any period of time we did not designate the swaps for hedge accounting, the change in the value of the swap agreements prior to designation would be recognized as other (expense) income.
 
Amounts receivable or payable arising at the settlement of hedged interest rate swaps are deferred and amortized as an adjustment to interest expense over the period of interest rate exposure provided the designated liability continues to exist.  Amounts receivable or payable arising at the settlement of unhedged interest rate swaps are reflected as other (expense) income and is listed as a component of other (expense) income.
 
Refer to “Interest rate risk” section above for further information regarding the interest rate swap agreements.
 
Currency and exchange rates risk
 
The international shipping industry’s functional currency is the U.S. Dollar.  Virtually all of our revenues and most of our operating costs are in U.S. Dollars.  We incur certain operating expenses in currencies other than the U.S. dollar, and the foreign exchange risk associated with these operating expenses is immaterial.
 
As part of our business strategy, we may enter into short-term forward currency contracts to protect ourselves from the risk arising from the fluctuation in the exchange rate associated with the cost basis of the Jinhui shares.
 
Investments
 
At March 31, 2015, we hold investments in Jinhui with a carrying amount of $28.8 million and investments in KLC with a carrying amount of $0.1 million, both of which are classified as available for sale (“AFS”) under Accounting Standards Codification 320-10, “Investments — Debt and Equity Securities” (“ASC 320-10”).  These investments are classified as noncurrent assets based on our intent to hold the investment at each reporting date.  The investments that are classified as AFS are subject to risk of changes in market value, which if determined to be impaired (other than temporarily impaired), could result in realized impairment losses.  We review the carrying value of such investments on a quarterly basis to determine if any valuation adjustments are appropriate under ASC 320-10.  We will continue to evaluate our investment in Jinhui and KLC on a quarterly basis to determine the likelihood of any significant adverse effects on the fair value and amount of any impairment. As a result of the adoption of fresh-start reporting on the Effective Date, we revalued these investments so that the new cost basis going forward is the fair market value on the Effective Date, we revalued these investments so that the new cost basis going forward is the fair market value on the Effective Date with the revaluation adjustments being recorded in Reorganization items, net.  For the three months ended March 31, 2015 and 2014, we have not deemed our investments to be impaired.  In the event we determine that the Jinhui or KLC investment are subject to any impairment, the amount of the impairment would be reclassified from AOCI and recorded as a loss in the Condensed Consolidated Statement of Operations for the amount of the impairment.
 
ITEM 4 .        CONTROLS AND PROCEDURES 
 
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
 
Under the supervision and with the participation of our management, including our President and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this report. Based upon that evaluation, our President and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.
 
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
 
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
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PART II:        OTHER INFORMATION 
 
ITEM 1 .          LEGAL PROCEEDINGS 
 
On March 28, 2014, the Genco Auvergne was arrested due to a disputed claim with the charterer of one of our other vessels, namely the Genco Ardennes. In order for us to release the Genco Auvergne from its arrest, we entered into a cash collateralized $0.9 million bank guarantee with Skandinaviska Enskilda Banken AB (the “SEB Bank Guarantee”) on April 3, 2014. The vessel has since been released from its arrest and the bank guarantee will remain in an escrow account until the arbitration related to this case is completed. The SEB Bank Guarantee resulted in additional indebtedness. As we are currently in default under the covenants of its 2007 Credit Facility due to the default on a scheduled debt amortization payment due on March 31, 2014, on April 3, 2014 we received a consent from the lenders under the 2007 Credit Facility to incur this additional indebtedness. Also, under the $253 Million Term Loan Facility for which the Genco Auvergne is collateralized, we may not incur additional indebtedness related to its collateralized vessels under this facility. We also received a consent from the lenders under the $253 Million Term Loan Facility on April 3, 2014 in order to enter the SEB Bank Guarantee.
 
In April 2015, six class action complaints were filed in the Supreme Court of the State of New York, County of New York, styled Erol Sarikaya v. Peter C. Georgiopoulos et al. , Index No. 651244/2015, filed on April 15, 2015, voluntarily dismissed, and refiled as Joshua Bourne v. Peter C. Georgiopoulos et al. , Index No. 651429/2015, filed on April 28, 2015,  Justin Wilson v. Baltic Trading Ltd., et al. , Index No. 651241/2015, filed on April 15, 2015, Sangeetha Ganesan v. Baltic Trading Limited et al. , Index No. 651279/2015, filed on April 17, 2015, Edward Braunstein v. Peter C. Georgiopoulos et al. , Index No. 651368/2015, filed on April 23, 2015, Larry Williams v. Baltic Trading Ltd., et al. , Index No. 651371/2015, filed on April 23, 2015, and Larry Goldstein and Bernhard Stomporowski v. John C. Wobensmith et al.,  Index No. 651407/2015, filed on April 27, 2015. All six complaints purport to be brought by and on behalf of the Baltic Trading’s shareholders. The plaintiff in each action alleges the proposed merger does not fairly compensate Baltic Trading’s shareholders and undervalues Baltic Trading. Each lawsuit names as defendants some or all of the Company, Baltic Trading, the individual members of Baltic Trading’s board, the Company’s and Baltic Trading’s President, and the Company’s merger subsidiary. The claims generally allege (i) breaches of fiduciary duties of good faith, due care, disclosure to shareholders, and loyalty, including for failing to maximize shareholder value, and (ii) aiding and abetting those breaches. Among other relief, the complaints seek an injunction against the merger, declaratory judgments that the individual defendants breached fiduciary duties, rescission of the merger agreement, and unspecified damages.  The Company does not believe that it is probable that the resolution of these matters will have a material financial reporting consequence.
 
We have not been involved in any other legal proceedings which we believe are likely to have, or have had a significant effect on our business, financial position, results of operations or cash flows, nor are we aware of any proceedings that are pending or threatened which we believe are likely to have a significant effect on our business, financial position, results of operations or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims would be covered by insurance, subject to customary deductibles. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.
 
ITEM 1A .       RISK FACTORS 
 
The information set forth under the section entitled “Risk Factors” in the Company’s Registration Statement on Form S-4 filed with the SEC on May 4, 2015 is incorporated herein by reference.
 
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ITEM 6 .  EXHIBITS 

Exhibit	 	Document	
 	 	 	
2.1	 	Agreement and Plan of Merger, dated as of April 7, 2015, by and among Genco Shiping & Trading Limited, Poseidon Merger Sub Limited and Baltic Trading Limited.(1)	
 	 	 	
2.2	 	Stock Purchase Agreement, dated as of April 7, 2015, by and between Genco Shipping & Trading Limited and Baltic Trading Limited.(1)	
 	 	 	
3.1	 	Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited.(2)	
 	 	 	
3.2	 	Amended and Restated By-Laws of Genco Shipping & Trading Limited, dated as of July 9, 2014.(2)	
 	 	 	
4.1	 	Form of Specimen Stock Certificate of Genco Shipping & Trading Limited.(3)	
 	 	 	
4.2	 	Form of Specimen Warrant Certificate of Genco Shipping & Trading Limited.(3)	
 	 	 	
10.1	 	Voting and Support Agreement, dated as of April 7, 2015, by and among Baltic Trading Limited, Genco Shipping & Trading Limited, and the entities listed on Schedule A thereto.(1)	
 	 	 	
10.2	 	Loan Agreement, dated as of April 7, 2015, by and among Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent and security agent and the banks and financial institutions party thereto, as lenders.*	
 	 	 	
10.3	 	Guarantee, dated as of April 7, 2015, made by Genco Shipping & Trading Limited to ABN AMRO Capital USA LLC.*	
 	 	 	
10.4	 	Amendment and Waiver Agreement dated as of April 30, 2015 by and among Genco as borrower, Genco Bay Limited and other subsidiaries of Genco named therein as guarantors, and Credit Agricole Corporate and Investment Bank.*	
 	 	 	
10.5	 	Waiver Agreement dated as of April 30, 2015 by and among Genco as borrower, Genco Lorraine Limited and other subsidiaries of Genco named therein as guarantors and, Deutsche Bank Luxembourg S.A.*	
 	 	 	
10.6	 	Loan Agreement by and among Baltic Tiger Limited and Baltic Lion limited as borrowers, the banks listed therein as lenders, and DVB Bank SE, as agent, arranger, and security agent, dated as of December 3, 2013.(4)	
 	 	 	
10.7	 	First Supplemental Agreement to Secured Loan Facility Agreement, dated as of April 7, 2015, by and among Baltic Tiger Limited, Baltic Lion Limited, Baltic Trading Limited, DVB Bank SE, and the lenders listed on Schedule 1 thereto. (5)	
 	 	 	
10.8	 	Guarantee and Indemnity dated April 8, 2015 by Genco Shipping & Trading Limited in favor of DVB Bank SE.(1)	
 	 	 	
10.9	 	Letter Agreement dated April 30, 2015 between Genco Shipping & Trading Limited and John C. Wobensmith.(6)	
 	 	 	
10.10	 	Letter Agreement dated April 30, 2015 between Baltic Trading Limited and John C. Wobensmith.(6)	
 	 	 	
31.1	 	Certification of President pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as	
 	 	amended.*	
 	 	 	
31.2	 	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.*	
 	 	 	
32.1	 	Certification of President pursuant to 18 U.S.C. Section 1350.*	
 	 	 	
32.2	 	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*	
 	 	 	
101	 	The following materials from Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014 (Unaudited), (ii) Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014 (Unaudited), (iii) Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2015 and 2014 (Unaudited), (iv) Condensed Consolidated Statements of Equity for the three months ended March 31, 2015 and 2014 (Unaudited), (v) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014 (Unaudited), and (vi) Notes to Condensed	
 
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 	 	Consolidated Financial Statements (Unaudited).**	

(*)	 	Filed with this report.	
 	 	 	
(**)	 	Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 hereto are not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are not deemed filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.	
 	 	 	
(1)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 8, 2015.	
 	 	 	
(2)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2014.	
 	 	 	
(3)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2014.	
 	 	 	
(4)	 	Incorporated by reference to Baltic Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on December 6, 2013.	
 	 	 	
(5)	 	Incorporated by reference to Baltic Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 8, 2015.	
 	 	 	
(6)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on May 4, 2015.	
 
(Remainder of page left intentionally blank)
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 	 	GENCO SHIPPING & TRADING LIMITED	

 	DATE: May 8, 2015	By:	/s/ John C. Wobensmith	
 	 	John C. Wobensmith	
 	 	President	
 	 	(Principal Executive Officer)	

 	DATE: May 8, 2015	By:	/s/ Apostolos Zafolias	
 	 	Apostolos Zafolias	
 	 	Chief Financial Officer	
 	 	(Principal Financial Officer)	
 
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Exhibit Index

Exhibit	 	Document	
 	 	 	
2.1	 	Agreement and Plan of Merger, dated as of April 7, 2015, by and among Genco Shiping & Trading Limited, Poseidon Merger Sub Limited and Baltic Trading Limited.(1)	
 	 	 	
2.2	 	Stock Purchase Agreement, dated as of April 7, 2015, by and between Genco Shipping & Trading Limited and Baltic Trading Limited.(1)	
 	 	 	
3.1	 	Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited.(2)	
 	 	 	
3.2	 	Amended and Restated By-Laws of Genco Shipping & Trading Limited, dated as of July 9, 2014.(2)	
 	 	 	
4.1	 	Form of Specimen Stock Certificate of Genco Shipping & Trading Limited.(3)	
 	 	 	
4.2	 	Form of Specimen Warrant Certificate of Genco Shipping & Trading Limited.(3)	
 	 	 	
10.1	 	Voting and Support Agreement, dated as of April 7, 2015, by and among Baltic Trading Limited, Genco Shipping & Trading Limited, and the entities listed on Schedule A thereto.(1)	
 	 	 	
10.2	 	Loan Agreement, dated as of April 7, 2015, by and among Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent and security agent and the banks and financial institutions party thereto, as lenders.*	
 	 	 	
10.3	 	Guarantee, dated as of April 7, 2015, made by Genco Shipping & Trading Limited to ABN AMRO Capital USA LLC.*	
 	 	 	
10.4	 	Amendment and Waiver Agreement dated as of April 30, 2015 by and among Genco as borrower, Genco Bay Limited and other subsidiaries of Genco named therein as guarantors, and Credit Agricole Corporate and Investment Bank.*	
 	 	 	
10.5	 	Waiver Agreement dated as of April 30, 2015 by and among Genco as borrower, Genco Lorraine Limited and other subsidiaries of Genco named therein as guarantors and, Deutsche Bank Luxembourg S.A.*	
 	 	 	
10.6	 	Loan Agreement by and among Baltic Tiger Limited and Baltic Lion limited as borrowers, the banks listed therein as lenders, and DVB Bank SE, as agent, arranger, and security agent, dated as of December 3, 2013.(4)	
 	 	 	
10.7	 	First Supplemental Agreement to Secured Loan Facility Agreement, dated as of April 7, 2015, by and among Baltic Tiger Limited, Baltic Lion Limited, Baltic Trading Limited, DVB Bank SE, and the lenders listed on Schedule 1 thereto. (5)	
 	 	 	
10.8	 	Guarantee and Indemnity dated April 8, 2015 by Genco Shipping & Trading Limited in favor of DVB Bank SE.(1)	
 	 	 	
10.9	 	Letter Agreement dated April 30, 2015 between Genco Shipping & Trading Limited and John C. Wobensmith.(6)	
 	 	 	
10.10	 	Letter Agreement dated April 30, 2015 between Baltic Trading Limited and John C. Wobensmith.(6)	
 	 	 	
31.1	 	Certification of President pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as	
 	 	amended.*	
 	 	 	
31.2	 	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.*	
 	 	 	
32.1	 	Certification of President pursuant to 18 U.S.C. Section 1350.*	
 	 	 	
32.2	 	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*	
 	 	 	
101	 	The following materials from Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014 (Unaudited), (ii) Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014 (Unaudited), (iii) Condensed Consolidated Statements of	
 
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Table of Contents

 	 	Comprehensive Loss for the three months ended March 31, 2015 and 2014 (Unaudited), (iv) Condensed Consolidated Statements of Equity for the three months ended March 31, 2015 and 2014 (Unaudited), (v) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014 (Unaudited), and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited).**	

(*)	 	Filed with this report.	
 	 	 	
(**)	 	Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 hereto are not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are not deemed filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.	
 	 	 	
(1)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 8, 2015.	
 	 	 	
(2)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2014.	
 	 	 	
(3)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2014.	
 	 	 	
(4)	 	Incorporated by reference to Baltic Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on December 6, 2013.	
 	 	 	
(5)	 	Incorporated by reference to Baltic Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 8, 2015.	
 	 	 	
(6)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on May 4, 2015.	
 
(Remainder of page left intentionally blank)
 
62 

Exhibit 10.2
 
Execution Version
 
Secured Loan Agreement
 
Dated                        7 April 2015
 
(1)                                           Genco Commodus Limited
Genco Maximus Limited
Genco Claudius Limited
Genco Hunter Limited
Genco Warrior Limited
(each as Original Borrower)
 
(2)                                           The Financial Institutions
listed in Schedule 1
(as Original Lenders)
 
(3)                                           ABN AMRO Capital USA LLC
(as Arranger)
 
(4)                                           ABN AMRO Capital USA LLC
(as Agent)
 
(5)                                           ABN AMRO Capital USA LLC
(as Security Agent)

 

 
Contents

 	 	Page	
 	 	 	
Section 1	Interpretation	1	
 	 	 	
1	Definitions and Interpretation	1	
 	 	 	
Section 2	The Loan	27	
 	 	 	
2	The Loan	27	
 	 	 	
3	Purposes	29	
 	 	 	
4	Conditions of Utilisation	29	
 	 	 	
Section 3	Utilisation	32	
 	 	 	
5	Advance	32	
 	 	 	
Section 4	Repayment, Prepayment and Cancellation	33	
 	 	 	
6	Repayment	33	
 	 	 	
7	Illegality, Prepayment and Cancellation	34	
 	 	 	
Section 5	Costs of Utilisation	37	
 	 	 	
8	Interest	37	
 	 	 	
9	Interest Periods	37	
 	 	 	
10	Changes to the Calculation of Interest	38	
 	 	 	
11	Fees	39	
 	 	 	
Section 6	Additional Payment Obligations	40	
 	 	 	
12	Tax Gross Up and Indemnities	40	
 	 	 	
13	Increased Costs	45	
 	 	 	
14	Other Indemnities	46	
 	 	 	
15	Mitigation by the Lenders	49	
 	 	 	
16	Costs and Expenses	49	
 	 	 	
Section 7	Security and Application of Moneys	50	
 	 	 	
17	Security Documents and Application of Moneys	50	
 	 	 	
Section 8	Representations, Undertakings and Events of Default	55	
 	 	 	
18	Representations	55	
 	 	 	
19	Information Undertakings	60	

 

20	Financial Covenants	64	
 	 	 	
21	General Undertakings	65	
 	 	 	
22	Events of Default	71	
 	 	 	
Section 9	Changes to Parties	77	
 	 	 	
23	Changes to the Lenders	77	
 	 	 	
24	Changes to the Security Parties	81	
 	 	 	
Section 10	The Finance Parties	83	
 	 	 	
25	Role of the Agent, the Security Agent and the Arranger	83	
 	 	 	
26	Conduct of Business by the Finance Parties	94	
 	 	 	
27	Sharing among the Finance Parties	94	
 	 	 	
Section 11	Administration	96	
 	 	 	
28	Payment Mechanics	96	
 	 	 	
29	Set-Off	100	
 	 	 	
30	Notices	100	
 	 	 	
31	Calculations and Certificates	102	
 	 	 	
32	Partial Invalidity	102	
 	 	 	
33	Remedies and Waivers	102	
 	 	 	
34	Amendments and Waivers	103	
 	 	 	
35	Confidentiality	107	
 	 	 	
36	Disclosure of Lender Details by Agent	111	
 	 	 	
37	Counterparts	113	
 	 	 	
38	Joint and Several Liability	113	
 	 	 	
Section 12	Governing Law and Enforcement	115	
 	 	 	
39	Governing Law	115	
 	 	 	
40	Enforcement	115	
 	 	 	
Schedule 1	The Original Lenders	116	
 	Part I The Original Lenders	116	
 	 	 	
Schedule 2	Part I Conditions Precedent	117	
 	Part II Conditions Subsequent	120	
 	Part III Conditions precedent in respect of an Increase Request	122	
 	Part IV Conditions subsequent in respect of an Increase Request	127	

 

Schedule 3	Drawdown Request	128	
 	 	 	
Schedule 4	Form of Increase Confirmation	129	
 	 	 	
Schedule 5	Form of Transfer Certificate	131	
 	 	 	
Schedule 6	Form of Assignment Agreement	134	
 	 	 	
Schedule 7	Form of Accession Deed	137	
 	 	 	
Schedule 8	Form of Compliance Certificate	139	

 
Loan Agreement
 
Dated        7 April 2015
 
Between:
 
(1)                                           Genco Commodus Limited , a company incorporated under the law of the Marshall Islands, with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960; Genco Maximus Limited , a company incorporated under the law of the Marshall Islands, with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960; Genco Claudius Limited , a company incorporated under the law of the Marshall Islands, with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960; Genco Hunter Limited , a company incorporated under the law of the Marshall Islands, with registered office at the Marshall Islands, with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960; and Genco Warrior Limited , a company incorporated under the law of the Marshall Islands, with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (together the  “Original Borrowers ” and each a “ Original Borrower ”) jointly and severally; and
 
(2)                                           The Financial Institutions listed in Schedule 1 ( The Original Lenders ), each acting through its Facility Office (together the “ Original Lenders ” and each an “ Original Lender ”); and
 
(3)                                           ABN AMRO Capital USA LLC , acting as arranger through its office at 100 Park Avenue, 17 th  Floor, New York, NY 10017, USA (in that capacity, the “ Arranger ”); and
 
(4)                                           ABN AMRO Capital USA LLC , acting as agent through its office at 100 Park Avenue, 17 th  Floor, New York, NY 10017, USA (in that capacity, the “ Agent ”); and
 
(5)                                           ABN AMRO Capital USA LLC , acting as security agent through its office at 100 Park Avenue, 17 th  Floor, New York, NY 10017, USA (in that capacity, the “ Security Agent ”).
 
It is agreed as follows:
 
Section 1                                              Interpretation
 
1                                                   Definitions and Interpretation
 
1.1                                         Definitions In this Agreement:
 
“ Acceptable Bank ” means a bank or financial institution which has a rating for its long-term unsecured and non-credit-enhanced debt obligations of A- or higher by Standard & Poor’s Rating Services or Fitch Ratings Ltd or A3 or higher by Moody’s Investors Service Limited or a comparable rating from an internationally recognised credit rating agency.
 
“ Accession Deed ” means a document substantially in the form set out in Schedule 7 ( Form of Accession Deed ).
 
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“ Account Control Agreements ” means the account control agreements between the Borrowers (or any of them), the Account Holder, and the Security Agent which are referred to in Clause 17.1.4 ( Security Documents ) and “ Account Control Agreement ” means any one of them.
 
“ Account Holder ” means Nordea Bank Finland plc acting through its New York branch or any other bank or financial institution which at any time, with the Security Agent’s prior written consent, holds the Earnings Accounts.
 
“ Accounts ” means the Earnings Accounts.
 
“ Account Charge ” means the deed of charge or account pledge agreement (as applicable) referred to in Clause 17.1.4 ( Security Documents ).
 
“ Additional Borrower ” means a company which becomes an Additional Borrower in accordance with Clause 24.2 ( Additional Borrowers ).
 
“ Additional Vessels ” means the following vessels, and everything now or in the future belonging to them on board and ashore, registered under the respective flags set out below in the ownership of the respective owners set out below and each Purchased Vessel and “ Additional Vessel ” means any one of them:

Name of Additional 
Vessel	 	Flag	 	Owner	 	IMO 
Number	
GENCO CONSTANTINE	 	Hong Kong	 	Genco Constantine Limited	 	9361251	
GENCO AUGUSTUS	 	Hong Kong	 	Genco Augusted Limited	 	9361249	
GENCO LONDON	 	Hong Kong	 	Genco London Limited	 	9430038	
GENCO TITUS	 	Hong Kong	 	Genco Titus Limited	 	9410959	
GENCO TIBERIUS	 	Hong Kong	 	Genco Tiberius Limited	 	9331555	
GENCO HADRIAN	 	Marshall Islands	 	Genco Hadrian Limited	 	9422067	
GENCO PREDATOR	 	Marshall Islands	 	Genco Predator Limited	 	9316165	
GENCO CAVALIER	 	Marshall Islands	 	Genco Cavalier LLC	 	9345817	
 
“ Administration ” has the meaning given to it in paragraph 1.1.3 of the ISM Code.
 
“ Affiliate ” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
 
“ Annex VI ” means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997).
 
“ Approved Shipbroker ” means each of Clarksons, Fearnleys, Simpson Spence Young, Maersk Brokers and any other reputable, independent and first class firm of ship brokers acceptable to the Agent (acting reasonably).
 
2 

 
“ Approved Flag ” means the flag of Hong Kong, the flag of the Marshall Islands and any other flag that may be approved by the Agent (acting reasonably) upon the Borrowers’ request.
 
“ Assignments ” means all the forms of assignment referred to in Clause 17.1.2 ( Security Documents ).
 
“ Assignment Agreement ” means an agreement substantially in the form set out in Schedule 6 ( Form of Assignment Agreement ) or any other form agreed between the relevant assignor and assignee.
 
“ Authorisation ” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
 
“ Availability Period ” means the period from and including the date of this Agreement to and including 31 December 2019.
 
“ Borrower ” means an Original Borrower or an Additional Borrower.
 
“ Break Costs ” means the amount (if any) by which:
 
(a)                                           the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Drawing or an Unpaid Sum to the last day of the current Interest Period in respect of that Drawing or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
 
exceeds:
 
(b)                                           the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
 
“ Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York.
 
“ Cash Equivalents ” means (i) securities issued or directly and fully guaranteed or insured by the USA or any agency or instrumentality thereof (provided that the full faith and credit of the USA is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (ii) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company having capital, surplus and undivided profits aggregating in excess of $200,000,000, with maturities of not more than one year from the date of acquisition by such Person, (iii) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in (i) above entered into with any bank meeting the qualifications specified in clause (ii) above, (iv) commercial paper issued by any Person incorporated in the USA rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s and in each case maturing not more than one year after the date of acquisition by
 
3 

 
such Person, and (v) investments in money market funds substantially all of whose assets are comprised of securities of the types described in (i) through (iv) above.
 
“ Change of Control ” means:
 
(A)                                        in respect of a Guarantor, any time during which and for any reason:
 
(a)                                          there is a sale, lease or transfer of all or substantially all of the Guarantor’s assets to any Person or group (as such term is used in Section 13(d)(3) of the Exchange Act); or
 
(b)                                          there is a liquidation or dissolution of the Guarantor; or
 
(c)                                           there is a replacement of a majority of the directors on the board of directors of the Guarantor over a two-year period from the directors who constituted the board of directors of the Guarantor at the beginning of such period and such replacement has not been approved by a vote of at least a majority of the board of directors of the Guarantor then still in office who either were members of such board of directors at the beginning of such period or whose election as a member of such board of directors was previously so approved; or
 
(d)                                          there is a “change of control” or similar event (however described) in any documentation related to any Financial Indebtedness of the Guarantor or the Group or any member of the Group; or
 
(e)                                           any Person or group (as such term is used in Section 13(d)(3) of the Exchange Act) other than one or more of the Permitted Holders that at any time becomes the owner, directly or indirectly, beneficially or of record, of shares representing more than thirty per cent of the outstanding voting or economic equity interests of the Guarantor; and
 
(B)                                        in respect of a Borrower, any time during which and for any reason, the Guarantor fails to own, directly or indirectly, one hundred per cent of the capital stock or other equity interests of that Borrower.
 
“ Charged Property ” means all of the assets of the Security Parties which from time to time are, or are expressed to be, the subject of the Security Documents.
 
“ Chargor ” means Genco Shipping & Trading Limited, a company incorporated under the laws of the Marshall Islands with its principal place of business at 299 Park Avenue, 12 th  Floor, New York, New York 10171.
 
“ Charters ” means any charter of a duration of more than 18 months (including extension options) on the terms and subject to the conditions of which the Borrowers respectively may charter the Vessels to a charterer and “ Charter ” means any one of them.
 
“ Code ” means the US Internal Revenue Code of 1986.
 
“ Commercial Manager ” means Genco Shipping & Trading Limited, a company incorporated under the laws of the Marshall Islands with principal place of business at 299 Park Avenue, 12 th  Floor, New York, New York 10171.
 
4 

 
“ Commitment ” means:
 
(a)                                           in relation to an Original Lender, the amount set opposite its name under the heading “Commitment” in Schedule 1 ( The Original Lenders ) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and
 
(b)                                           in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 ( Increase ),
 
to the extent not cancelled, reduced or transferred by it under this Agreement.
 
“ Commitment Fee ” means the commitment fee to be paid by the Borrowers to the Agent under Clause 11.1 ( Commitment Fee ).
 
“ Compliance Certificate ” means a certificate substantially in the form set out in Schedule 8 ( Form of Compliance Certificate ).
 
“ Confidential Information ” means all information relating to any Security Party, the Finance Documents or the Loan of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Loan from either:
 
(a)                                           any Security Party or any of its advisers; or
 
(b)                                           another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Security Party or any of its advisers,
 
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:
 
(i)                                              is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 35 ( Confidentiality ); or
 
(ii)                                           is identified in writing at the time of delivery as non-confidential by any Security Party or any of its advisers; or
 
(iii)                                        is known by that Finance Party before the date the information is disclosed to it in accordance with (a) or (b) or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with any Security Party and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.
 
“ Confidentiality Undertaking ” means a confidentiality undertaking substantially in a recommended form of the Loan Market Association at the relevant time
 
“ Consolidated Net Worth ” means the Net Worth of the Guarantor and its Subsidiaries determined on a consolidated basis in accordance with GAAP (and
 
5 

 
including for this purpose the Guarantor’s investment in Baltic Trading Limited) after appropriate deduction for any minority interest in Subsidiaries provided that for all purposes of this definition Baltic Trading Limited and its Subsidiaries shall be excluded as long as the Guarantor does not own more than 50% of the economic interests in Baltic Trading Limited.
 
“ Contingent Obligation ” means, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Financial Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefore, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business and any products warranties extended in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if the less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.
 
“ Cost of Funds Rate ” means the rate per annum determined by the Agent at which U.S. dollar deposits, loans or advances of an amount comparable to the amount of the respective Loan and for a period comparable to the relevant Interest Period are offered to the Agent in such market or from such other funding source (including, without limitation, the Agent’s Affiliates) as the Agent shall select from time to time in its sole discretion at or about 11:00 a.m. (New York City time) on the date of the commencement of each Interest Period or, if so selected by the Agent, on the first or second Business Day prior to such commencement, such rate to be increased to reflect all market, liquidity and regulatory conditions which the Agent deems applicable from time to time and to remain in effect for the entire Interest Period, provided that such rate is not necessarily limited to the actual cost to the Agent to fund the specific required Loan and may exceed the Agent’s and its Affiliates’ actual cost of borrowing in the interbank market or other markets in which the Agent or its Affiliates may obtain funds from time to time for amounts similar to the amount of the requested Loan.
 
“ CTA ” means the Corporation Tax Act 2009.
 
“ Debt Service Reserve ” means:
 
6 

 
(a)                                          for the period from 7 April 2015 up to and including 7 April 2016, a minimum amount of $3,200,000; and
 
(b)                                          at any other time, a minimum amount of $1,600,000,
 
in each case reserved for use only towards payment for any shortfall in Earnings, provided always that the amount required shall be increased pro rata with each increase in the Commitments in accordance with Clause 2.2 ( Increase ).
 
“ Deeds of Covenants ” means the deeds of covenants referred to in Clause 17.1.1 ( Security Documents ).
 
“ Default ” means an Event of Default or any event or circumstance which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
 
“ Defaulting Lender ” means any Lender:
 
(a)                                           which has failed to make its participation in a Drawing available (or has notified the Agent or the Borrowers (which have notified the Agent) that it will not make its participation in a Drawing available) by the relevant Drawdown Date in accordance with Clause 5.3 ( Lenders’ participation );
 
(b)                                           which has otherwise rescinded or repudiated a Finance Document; or
 
(c)                                            with respect to which an Insolvency Event has occurred and is continuing,
 
unless, in the case of (a):
 
(i)                                              its failure to pay is caused by:
 
(A)                                         administrative or technical error; or
 
(B)                                         a Disruption Event; and
 
payment is made within three Business Days of its due date; or
 
(ii)                                           the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.
 
“ Delegate ” means any delegate, agent, attorney or co-trustee appointed by the Security Agent.
 
“ Disruption Event ” means either or both of:
 
(a)                                           a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Loan (or otherwise in order for the transactions contemplated by
 
7 

 
the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
 
(b)                                           the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
 
(i)                                               from performing its payment obligations under the Finance Documents; or
 
(ii)                                            from communicating with other Parties in accordance with the terms of the Finance Documents,
 
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
 
“ DOC ” means, in relation to the ISM Company, a valid Document of Compliance issued for the ISM Company by the Administration under paragraph 13.2 of the ISM Code.
 
“ Drawdown Date ” means the date on which the relevant Drawing is advanced under Clause 5 ( Advance ).
 
“ Drawdown Request ” means a notice substantially in the form set out in Schedule 3 ( Drawdown Request ).
 
“ Drawing ” means any one amount advanced or to be advanced pursuant to a Drawdown Request or, where the context permits, the amount advanced and for the time being outstanding and “ Drawings ” means more than one of them.
 
“ Earnings ” means all hires, freights, pool income and other sums payable to or for the account of a Borrower in respect of a Vessel including (without limitation) all remuneration for salvage and towage services, demurrage and detention moneys, contributions in general average, compensation in respect of any requisition for hire, and damages and other payments (whether awarded by any court or arbitral tribunal or by agreement or otherwise) for breach, termination or variation of any contract for the operation, employment or use of a Vessel.
 
“ Earnings Account ” means the bank account to be opened in the name of each Borrower with the Account Holder and designated “[Name of Borrower] — Earnings Account” and “ Earnings Accounts ” means more than one of them.
 
“ Encumbrance ” means a mortgage, charge, assignment, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
 
“ Environmental Approval ” means any present or future permit, ruling, variance or other Authorisation required under Environmental Laws.
 
“ Environmental Claim ” means any claim, proceeding, formal notice or investigation by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, “claim” includes a
 
8 

 
claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.
 
“ Environmental Incident ” means:
 
(a)                                           any release, emission, spill or discharge into a Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from a Vessel; or
 
(b)                                           any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than a Vessel and which involves a collision between a Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Vessel and/or any Security Party and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
 
(c)                                            any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from a Vessel and in connection with which a Vessel is actually or potentially liable to be arrested and/or where any Security Party and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval.
 
“ Environmental Law ” means any present or future law or regulation relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
 
“ Environmentally Sensitive Material ” means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
 
“ Event of Default ” means any event or circumstance specified as such in Clause 22 ( Events of Default ).
 
“ Facility Office ” means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.
 
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“ Facility Period ” means the period beginning on the date of this Agreement and ending on the date when the whole of the Indebtedness has been paid in full and the Security Parties have ceased to be under any further actual or contingent liability to the Finance Parties under or in connection with the Finance Documents.
 
“ Fair Market Value ” means the market value of a Fleet Vessel (other than a Vessel) calculated in accordance with Clause 17.15 ( Fleet Vessels ).
 
“ FATCA ” means:
 
(a)                                           sections 1471 to 1474 of the Code or any associated regulations;
 
(b)                                           any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in (a); or
 
(c)                                            any agreement pursuant to the implementation of any treaty, law or regulation referred to in (a) or (b) with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
 
“ FATCA Application Date ” means:
 
(a)                                           in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;
 
(b)                                           in relation to a “withholdable payment” described in section 1473(1)(A)(ii) of the Code (which relates to “gross proceeds” from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or
 
(c)                                            in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within (a) or (b), 1 January 2017,
 
or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.
 
“ FATCA Deduction ” means a deduction or withholding from a payment under a Finance Document required by FATCA.
 
“ FATCA Exempt Party ” means a Party that is entitled to receive payments free from any FATCA Deduction.
 
“ Fee Letter ” means any letter or letters, relating to this Agreement entered into or to be entered into among the Arranger, the Borrowers, the Agent and any other party setting out any of the fees referred to in Clause 11 ( Fees ) and Fee Letters mean all of them.
 
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“ Finance Documents ” means this Agreement, the Security Documents, the Fee Letter and any other document designated as such by the Agent and the Borrowers and “ Finance Document ” means any one of them.
 
“ Finance Parties ” means the Arranger, the Agent, the Security Agent, the Swap Provider and the Lenders and “ Finance Party ” means any one of them.
 
“ Financial Indebtedness ” means, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services, (ii) the maximum amount available to be drawn under all letters of credit (including letters of credit) issued for the account of such Person and all unpaid drawings in respect of such letters of credit, (iii) all Financial Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any lien on any property owned by such Person; whether or not such Financial Indebtedness has been assumed by such Person (to the extent of the value of the respective property), (iv) the aggregate amount required to be capitalized under leases under which such Person is the lessee, (v) all obligations of such person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e., take or pay and similar obligations, (vi) all Contingent Obligations of such Person and (vii) all obligations under any Interest Rate Protection Agreement or Other Hedging Agreement or under any similar type of agreement; provided that Financial Indebtedness shall in any event not include trade payables and expenses accrued in the ordinary course of business; provided that for the avoidance of doubt, “Financial Indebtedness” shall not include letters of credit, guarantees or any similar debt instruments which collateralize the Borrower’s obligations for the release of the vessel m.v. “GENCO AUVERGNE” and for letters of credit in respect of rent obligations under real property leases;
 
“ Fleet Market Value ” means the aggregate Fair Market Value of the Fleet Vessels.
 
“ Fleet Vessels ” means any vessel (including each Vessel) from time to time directly or indirectly owned by the Guarantor (but excluding any vessel directly or indirectly owned by Baltic Trading Limited and its Subsidiaries as long as the Guarantor does not own more than 50% of the economic interests in Baltic Trading Limited), as they appear in the then most recent financial statements delivered pursuant to Clauses 19.1 (Financial statements) and “ Fleet Vessel ” means any one of them.
 
“ GAAP ” means generally accepted accounting principles in the USA.
 
“ Group ” means the Parent and each of the Subsidiaries for the time being provided that for all purposes of the definition Baltic Trading Limited and its Subsidiaries shall be excluded as long as the Guarantor does not own more than 50% of the economic interests in Baltic Trading Limited.
 
“ Guarantee ” means the guarantee and indemnity referred to in Clause 17.1.3 ( Security Documents ).
 
“ Guarantor ” means Genco Shipping & Trading Limited, a corporation incorporated under the laws of the Marshall Islands whose principal place of business is at 299 Park Avenue, 12 th  Floor, New York, New York 10171.
 
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“ Guarantor Confirmation ” means a deed of confirmation to be entered into between the Guarantor and the Security Agent.
 
“ Holding Company ” means, in relation to a person, any other person in respect of which it is a Subsidiary.
 
“ IAPPC ” means a valid international air pollution prevention certificate for a Vessel issued under Annex VI.
 
“ IFRS ” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
 
“ Impaired Agent ” means the Agent at any time when:
 
(a)                                           it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;
 
(b)                                           the Agent otherwise rescinds or repudiates a Finance Document;
 
(c)                                            (if the Agent is also a Lender) it is a Defaulting Lender under (a) or (b) of the definition of “Defaulting Lender”; or
 
(d)                                           an Insolvency Event has occurred and is continuing with respect to the Agent;
 
unless, in the case of (a):
 
(i)                                              its failure to pay is caused by:
 
(A)                                         administrative or technical error; or
 
(B)                                         a Disruption Event; and
 
payment is made within three Business Days of its due date; or
 
(ii)                                           the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.
 
“ Increase Confirmation ” means a confirmation substantially in the form set out in Schedule 4 ( Form of Increase Confirmation ).
 
“ Increase Lender ” has the meaning given to that term in Clause 2.2.3 ( Increase ).
 
“ Increase Request ” means a request of the Borrowers addressed to the Agent, requesting, subject always to the provisions of this Agreement, that all Commitments are increased and specifying the Additional Vessel or Additional Vessels and the Additional Borrower or Additional Borrowers in respect of which the Increase Request is being submitted.
 
“ Indebtedness ” means the aggregate from time to time of: the amount of the Loan outstanding; all accrued and unpaid interest on the Loan; and all other sums of any nature (together with all accrued and unpaid interest on any of those sums) payable to any of the Finance Parties under all or any of the Finance Documents.
 
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“ Insolvency Event ” in relation to an entity means that the entity:
 
(a)                                           is dissolved (other than pursuant to a consolidation, amalgamation or merger);
 
(b)                                           becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;
 
(c)                                            makes a general assignment, arrangement or composition with or for the benefit of its creditors;
 
(d)                                           institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;
 
(e)                                            has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in (d) and:
 
(i)                                               results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or
 
(ii)                                            is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;
 
(f)                                             has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009;
 
(g)                                            has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
 
(h)                                           seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in (d));
 
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(i)                                               has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
 
(j)                                              causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in (a) to (i); or
 
takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
 
“ Insurances ” means all policies and contracts of insurance (including all entries in protection and indemnity or war risks associations) which are from time to time taken out or entered into in respect of or in connection with a Vessel or her increased value or her Earnings and (where the context permits) all benefits under such contracts and policies, including all claims of any nature and returns of premium.
 
“ Interest Payment Date ” means each date for the payment of interest in accordance with Clause 8.2 ( Payment of interest ).
 
“ Interest Period ” means each period determined in accordance with Clause 9 ( Interest Periods ) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 ( Default interest ).
 
“ Interest Rate Protection Agreement ” means any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement, interest rate floor agreement or other similar agreement or arrangement.
 
“ ISM Code ” means the International Management Code for the Safe Operation of Ships and for Pollution Prevention.
 
“ ISM Company ” means, at any given time, the company responsible for a Vessel’s compliance with the ISM Code under paragraph 1.1.2 of the ISM Code.
 
“ ISPS Code ” means the International Ship and Port Facility Security Code.
 
“ ISSC ” means a valid international ship security certificate for a Vessel issued under the ISPS Code.
 
“ ITA ” means the Income Tax Act 2007.
 
“ Jinhui ” means Jinhui Shipping and Transportation Limited a company limited by shares formed under the laws of Bermuda and whose capital stock is listed on the Oslo Stock Exchange.
 
“ Joint Venture ” means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.
 
“ Legal Opinion ” means any legal opinion delivered to the Agent under Clause 4.1 ( Initial conditions precedent ) or Clause 4.6 ( Conditions subsequent ).
 
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“ Legal Reservations ” means:
 
(a)                                           the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
 
(b)                                           the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;
 
(c)                                            similar principles, rights and defences under the laws of any Relevant Jurisdiction; and
 
any other matters which are set out as qualifications or reservations as to matters of law of general application in the Legal Opinions.
 
“ Lender ” means:
 
(a)                                           any Original Lender; and
 
(b)                                           any bank, financial institution, trust, fund or other entity which has become a Party as a Lender in accordance with Clause 23 ( Changes to the Lenders ),
 
which in each case has not ceased to be a Lender in accordance with the terms of this Agreement.
 
“ Leverage ” means the aggregate Financial Indebtedness (excluding undrawn working capital lines) of the Group divided by the Value Adjusted Total Assets.
 
“ LIBOR ” means, in relation to any Drawing:
 
(a)                                           the applicable Screen Rate; or
 
(b)                                           (if (i) no Screen Rate is available for the currency of that Drawing or (ii) no Screen Rate is available for the relevant Interest Period) the Reference Bank Rate,
 
as of 11.00 a.m. on the Quotation Day for dollars and for a period equal in length to the relevant Interest Period and, if that rate is less than zero, LIBOR shall be deemed to be zero.
 
“ Limitation Acts ” means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984.
 
“ Loan ” means the aggregate amount advanced or to be advanced by the Lenders to the Borrowers under Clause 2 ( The Loan ) or, where the context permits, the principal amount advanced and for the time being outstanding.
 
“ Majority Lenders ” means a Lender or Lenders whose Commitments aggregate more than 66 2 / 3 % of the Total Commitments (or, if the Total Commitments have
 
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been reduced to zero, aggregated more than 66 2 / 3 % of the Total Commitments immediately prior to the reduction).
 
“ Management Agreements ” means:
 
(a)                                           the agreements for the commercial management of the Vessels between the Borrowers respectively and the Commercial Manager; and
 
(b)                                           the agreements for the technical management of the Vessels between the Borrowers respectively and the Technical Manager.
 
“ Managers ” means:
 
(a)                                           in relation to the commercial management of the Vessels, the Commercial Manager; and
 
(b)                                           in relation to the technical management of the Vessels, the Technical Manager,
 
or, in either case, such other commercial and/or technical managers of the Vessels nominated by the Borrowers as the Agent (acting on the institutions of the Majority Lenders) may approve, it being agreed that each Subsidiary of the Guarantor is an approved commercial and technical Manager and any company in the Wallem shipmanagement group, the V-ships group and the Anglo Eastern shipmanagement group is an approved technical Manager.
 
“ Managers’ Undertakings ” means the written undertakings of the Managers whereby, throughout the Facility Period unless otherwise agreed by the Agent:
 
(a)                                           in the case of the commercial manager, they will remain the commercial managers of the Vessels (as the case may be); and
 
(b)                                           they will not, without the prior written consent of the Agent, subcontract or delegate the commercial or technical management of the Vessels (as the case may be) to any third party.
 
“ Margin ” means
 
(a)                                          if an amount less than fifty per cent (50%) of the Original Maximum Loan Amount as increased pursuant to Clause 2.2 ( Increase ) is advanced:
 
(i)                                               3.4 per cent per annum if the VTL Coverage is greater than 250%;
 
(ii)                                            3.65 per cent per annum if the VTL Coverage is between 175% and 250% (inclusive in each case); and
 
(iii)                                         4 per cent per annum if the VTL Coverage is less than 175%; and
 
(b)                                          if an amount equal to or more than fifty per cent (50%) of the Original Maximum Loan Amount as increased pursuant to Clause 2.2 ( Increase ) is advanced;
 
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(i)                                               3.65 per cent per annum if the VTL Coverage is greater than 250%;
 
(ii)                                            3.9 per cent per annum if the VTL Coverage is between 175% and 250% (inclusive in each case); and
 
(iii)                                         4.25 per cent per annum if the VTL Coverage is less than 175%.
 
“ Market Value ” means the value of a Vessel conclusively determined as the arithmetic average of the valuations detailed below, on the basis of a charter-free sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing seller and a willing buyer and evidenced by a valuation of that Vessel by two (2) Approved Shipbrokers, in each case addressed to the Agent and certifying a value for that Vessel, such valuations being acceptable to the Agent (in form and substance).  Where any such valuation expresses the value as a range then the value shall be the average of that range.
 
“ Material Adverse Effect ” means in the reasonable opinion of the Majority Lenders a material adverse effect on:
 
(a)                                           the business, operations, property, condition (financial or otherwise) or prospects of any Security Party or the Group taken as a whole; or
 
(b)                                           the ability of any Security Party to perform its obligations under any Finance Document; or
 
(c)                                            the validity or enforceability of, or the effectiveness or ranking of any Encumbrance granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.
 
“ Maximum Loan Amount ”, which term shall, for the avoidance of doubt include at each and all times the Original Maximum Loan Amount, means $150,000,000 reduced from time to time in accordance with Clause 4.5 ( Reduction of Original Maximum Loan Amount ) and/or Clause 7.1.3 ( Illegality ) and/or Clause 7.5 ( Mandatory prepayment on sale or Total Loss ) and/or Clause 7.6 ( Mandatory Prepayment on a Change of Control ) and/or Clause 10.3.3 ( Alternative basis of interest or funding ) .
 
“ Minimum Consolidated Net Worth ” means an amount not less than (a) $786,360,204 plus (b) fifty per cent (50%) of the value of any subsequent primary equity offerings of the Guarantor completed after 31 March 2015.
 
“ MOAs ” means the memoranda of agreement on the terms and subject to the conditions of which the Sellers will sell the Purchased Vessels to the relevant Additional Borrowers respectively and “ MOA ” means any one of them.
 
“ Mortgages ” means the first preferred or priority statutory mortgages (as applicable) referred to in Clause 17.1.1 ( Security Documents ), together with the Deeds of Covenants (if applicable) and “ Mortgage ” means any one of them.
 
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“ Net Income ” means the net income of the Guarantor plus depreciation and amortization, amortization of restricted stock (inclusive of the amortization of warrants), any non-cash impairment attributable to the Guarantor’s minority investment in Jinhui or impairment due to the reduction in carrying value of the Fleet Vessels, less drydocking expenses incurred related to the Fleet Vessels, such as drydocking and special surveys costs .
 
“ Net Worth ” means, as to any Person, the sum of its capital stock, capital in excess of par or stated value of shares of its capital stock, retained earnings and any other account which, in accordance with GAAP, constitutes stockholders’ equity, but excluding treasury stock.
 
“ New Lender ” has the meaning given to that term in Clause 23.1 ( Assignments and transfers by the Lenders ).
 
“ Non-Consenting Lender ” has the meaning given to that term in Clause 34.4.4 ( Replacement of Lender ).
 
“ Operating Expenses ” means expenses properly and reasonably incurred by a Borrower in connection with the operation, employment, maintenance, repair and insurance of a Vessel.
 
“ Original Financial Statements ” means the audited consolidated financial statements of the Guarantor for the financial year ended 31 December 2014.
 
“ Original Jurisdiction ” means, in relation to a Security Party, the jurisdiction under whose laws that Security Party is incorporated as at the date of this Agreement.
 
“ Original Maximum Loan Amount ” means the lower of $60,000,000 and 50% of the aggregate Market Value of the Original Vessels, reduced from time to time in accordance with Clause 4.5 ( Reduction of Original Maximum Loan Amount ) and/or Clause 7.1.3 ( Illegality ) and/or Clause 7.5 ( Mandatory prepayment on sale or Total Loss ) and/or Clause 7.6 ( Mandatory Prepayment on a Change of Control ) and/or Clause 10.3.3 ( Alternative basis of interest or funding ).
 
“ Original Vessels ” means the following vessels, and everything now or in the future belonging to them on board and ashore, registered under the respective flags set out below in the ownership of the respective Borrowers set out below and “ Original Vessel ” means any one of them:

Name of Vessel	 	Flag	 	Borrower	 	IMO Number	
GENCO COMMODUS	 	Marshall Islands	 	Genco Commodus Limited	 	9422079	
GENCO MAXIMUS	 	Marshall Islands	 	Genco Maximus Limited	 	9422081	
GENCO CLAUDIUS	 	Marshall Islands	 	Genco Claudius Limited	 	9444819	
GENCO HUNTER	 	Marshall Islands	 	Genco Hunter Limited	 	9368871	
GENCO WARRIOR	 	Marshall Islands	 	Genco Warrior Limited	 	9316153	
 
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“ Other Hedging Agreement ” means any foreign exchange contracts, currency swap agreements, commodity agreements, forward freight agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency or commodity values.
 
“ Parent ” means Genco Shipping & Trading Limited, a company incorporated under the laws of the Marshall Islands with its principal place of business at 299 Park Avenue, 12 th  Floor, New York, New York 10171.
 
“ Party ” means a party to this Agreement.
 
“ Permitted Encumbrance ” means:
 
(a)                                           any Encumbrance which has the prior written approval of the Agent;
 
(b)                                           any Encumbrance arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by a Security Party and securing obligations not more than 30 days overdue;
 
(c)                                            any liens for current crews’ wages and salvage and liens incurred in the ordinary course of trading a Vessel up to an aggregate amount at any time not exceeding $750,000 per vessel;
 
(d)                                           any Encumbrance created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the relevant Security Party is actively prosecuting or defending such proceedings or arbitration in good faith; or
 
(e)                                            Encumbrances arising by operation of law in respect of Taxes which are not overdue for payment or in respect of Taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made.
 
“ Permitted Holders ” means (a) Mr. Peter Georgiopoulos (including his immediate family members and trusts to which he or such family members hold a beneficial interest, (b) any corporation or any other entity directly or indirectly controlled by Mr. Peter Georgiopoulos and (c) any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) who may at the time of the signing of this Agreement own, directly or indirectly, beneficially or of record, shares representing more than thirty per cent of the voting or economic equity interests of the Guarantor, any affiliate of any such person, and any member of such group or affiliate of such member.
 
“ Permitted Loan ” means a loan made by any Borrower to the Guarantor or a loan made by any Borrower to another Borrower.
 
“ Permitted Transaction ” means:
 
(a)                                           any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Encumbrance or Quasi-Security given, or other transaction arising, under the Finance Documents;
 
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(b)                                           transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of any Encumbrance or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arm’s length terms;
 
(c)                                            in the case of the Borrowers only, any shareholder loans made by the Guarantor to any Borrower which are fully subordinated to the Lenders on terms acceptable to the Lenders (acting in their absolute discretion); or
 
(d)                                           any amalgamation, demerger, merger, consolidation or corporate reconstruction between the Guarantor and a Group entity or a company which is, at the date of the Agreement, consolidated into the accounts of the Guarantor.
 
“ Person ” means any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.
 
“ Purchased Vessel ” means a dry bulk vessel which is to become a Fleet Vessel to be purchased by the Guarantor or a Subsidiary on the terms of an MOA and, upon completion of the sale, to be registered in the ownership of the Guarantor or a Subsidiary and “ Purchased Vessels ” means more than one of them.
 
“ Quarter Date ” means 31 March, 30 June, 30 September and 31 December of each calendar year.
 
“ Quasi-Security ” has the meaning given to that term in Clause 21.9 ( Negative pledge ).
 
“ Quotation Day ” means, in relation to any period for which an interest rate is to be determined (for dollars) two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market, in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).
 
“ Receiver ” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.
 
“ Reduction Date ” means each date falling at consecutive three monthly intervals after the date of this Agreement.
 
“ Reduction Profile ” means the profile issued or to be issued by the Agent, showing the reductions to be made on each Reduction Date, as the same may be adjusted from time to time, based on an age adjusted sixteen years to zero straight line repayment profile.
 
“ Reference Bank Rate ” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in dollars and for the relevant period, were it to do so by
 
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asking for and then accepting interbank offers for deposits in reasonable market size in dollars and for that period.
 
“ Reference Banks ” means, in relation to LIBOR, ABN Amro Bank N.V., Deutsche Bank AG and J.P. Morgan Chase & Co or such other banks as may be appointed by the Agent in consultation with the Borrowers).
 
“ Related Fund ” in relation to a fund (the “ first fund ”), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
 
“ Relevant Documents ” means the Finance Documents, the MOAs, the Charters and the Management Agreements and the Managers’ Undertakings.
 
“ Relevant Interbank Market ” means the London interbank market.
 
“ Relevant Jurisdiction ” means, in relation to a Security Party:
 
(a)                                           its Original Jurisdiction;
 
(b)                                           any jurisdiction where any asset subject to or intended to be subject to a Security Document to be executed by it is situated;
 
(c)                                            any jurisdiction where it conducts its business; and
 
(d)                                           the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
 
“ Repeating Representations ” means each of the representations set out in Clause 18.1.1 ( Status ) to Clause 18.1.6 ( Governing law and enforcement ) and Clause 18.1.9 ( No default ) to Clause 18.1.18 ( Pari passu ranking ).
 
“ Representative ” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
 
“ Requisition Compensation ” means all compensation or other money which may from time to time be payable to a Borrower as a result of a Vessel being requisitioned for title or in any other way compulsorily acquired (other than by way of requisition for hire).
 
“ Restricted Person ” means a person that is:
 
(a)                                           listed on, or owned or controlled by a person listed on any Sanctions List;
 
(b)                                           located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or territory that is the target of country-wide Sanctions); or
 
(c)                                            otherwise a target of Sanctions
 
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“ Sanctions ” means any economic or trade sanctions laws, embargoes, regulations freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):
 
(a)                                           imposed by law or regulation of the United Kingdom, the Council of the European Union or any of its Members States, the United Nations or its Security Council or the government of the United States of America, whether or not any Security Party or any Affiliate is legally bound to comply with the foregoing;
 
(b)                                           the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US Department of Treasury ( OFAC ), the United States Department of State, and Her Majesty’s Treasury ( HMT ) (together “ Sanctions Authorities ”); or
 
(c)                                            otherwise imposed by any law or regulation by which any Security Party or any Affiliate of any of them is bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of any Security Party or any Affiliate of any of them.
 
“ Sanctions List ” means the “Specially Designated Nationals and Blocked Persons” list issued by OFAC, the “Consolidated List of Financial Sanctions Targets and Investment Ban List” issued by HMT, or any similar list issued or maintained or made public by any of the Sanctions Authorities that has the effect of prohibiting transactions with such persons;
 
“ Screen Rate ” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters.  If such page or the service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers.
 
“ Secured Parties ” means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.
 
“ Security Documents ” means the Mortgages, the Assignments, the Guarantee, the Account Security Deed, the Account Control Agreements and the Share Charges or (where the context permits) any one or more of them, and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness and “ Security Document ” means any one of them.
 
“ Security Parties ” means each Borrower, each Guarantor, the Chargor and any other person who may at any time during the Facility Period be liable for, or provide security for, all or any part of the Indebtedness, and “ Security Party ” means any one of them.
 
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“ Sellers ” means the any person acting as seller of a Purchased Vessel to the relevant Borrower pursuant to the terms of the relevant MOA and “ Seller ” means any one of them.
 
“ Share Charges ” means the charge or charges of the issued share capital of the Borrowers referred to in Clause 17.1.5 ( Security Documents ).
 
“ Shareholder Rights Agreement ” means a shareholder rights agreement substantially similar to that shareholder rights agreement entered into as of 11 April 2007 and made between the Guarantor and Mellon Investor Services LLC, a New Jersey limited liability company, as rights agent.
 
“ SMC ” means a valid safety management certificate issued for a Vessel by or on behalf of the Administration under paragraph 13.7 of the ISM Code.
 
“ Subsidiary ” means, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time.
 
“ Tax ” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
 
“ Technical Manager ” means Wallem Ship Management Hong Kong Ltd or Anglo Eastern Ship Management or V. Ship Group (as the case may be).
 
“ Termination Date ” means 7 April 2020.
 
“ Total Commitments ” means the aggregate of the Commitments.
 
“ Total Assets ” means the amount which is equal to the total assets of the Guarantor as shown in the Guarantor’s applicable financial statements, provided that for all purposes of this definition Baltic Trading Limited and its Subsidiaries shall be excluded as long as the Guarantor does not own more than 50% of the economic interests in Baltic Trading Limited.
 
“ Total Loss ” means:
 
(a)                                          an actual, constructive, arranged, agreed or compromised total loss of a Vessel; or
 
(b)                                          the requisition for title or compulsory acquisition of a Vessel by any government or other competent authority (other than by way of requisition for hire); or
 
(c)                                            the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of a Vessel (not
 
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falling within (b)), unless that Vessel is released and returned to the possession of the relevant Borrower or any charterer under a Charter for that Vessel within 30 days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture in question.
 
“ Transfer Certificate ” means a certificate substantially in the form set out in Schedule 5 ( Form of Transfer Certificate ) or any other form agreed between the Agent and the Borrowers.
 
“ Transfer Date ” means, in relation to an assignment or a transfer, the later of:
 
(a)                                           the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and
 
(b)                                           the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate.
 
“ Treasury Transactions ” means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.
 
“ Trust Property ” means:
 
(a)                                          all benefits derived by the Security Agent from Clause 17 ( Security and Application of Moneys ); and
 
(b)                                          all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents,
 
with the exception of any benefits arising solely for the benefit of the Security Agent.
 
“ Unpaid Sum ” means any sum due and payable but unpaid by any Security Party under the Finance Documents.
 
“ US ” means the United States of America.
 
“ US Tax Obligor ” means:
 
(a)                                           a Security Party which is resident for tax purposes in the US; or
 
(b)                                           a Security Party some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
 
“ Value Adjusted Total Assets ” means the Total Assets of the Guarantor adjusted in each case for the difference of the book value of the Fleet Vessels (as evidenced in the most recent financial statements delivered pursuant to Clause 19.1 ( Financial statements )) and the Fleet Market Value.
 
“ VAT ” means:
 
(a)                                           any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
 
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(b)                                           any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in (a), or imposed elsewhere.
 
“ Vessel ” means an Original Vessel or an Additional Vessel.
 
1.2                                         Construction    Unless a contrary indication appears, any reference in this Agreement to:
 
1.2.1                              any “ Lender ”, any “ Borrower ”, the “ Guarantor ”, the “ Arranger ”, the “ Agent ”, any “ Secured Party ”, the “ Security Agent ”, any “ Finance Party ” or any “ Party ” shall be construed so as to include its successors in title, permitted assignees and permitted transferees;
 
1.2.2                              “ assets ” includes present and future properties, revenues and rights of every description;
 
1.2.3                              a “ Finance Document ”, a “ Security Document ”, a “ Relevant Document ” or any other document is a reference to that Finance Document, Security Document, Relevant Document or other document as amended, novated, supplemented, extended or restated from time to time;
 
1.2.4                              a “ group of Lenders ” includes all the Lenders;
 
1.2.5                              “ indebtedness ” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
 
1.2.6                              a “ person ” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership or other entity (whether or not having separate legal personality);
 
1.2.7                              a “ regulation ” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;
 
1.2.8                              a provision of law is a reference to that provision as amended or re-enacted from time to time; and
 
1.2.9                              a time of day (unless otherwise specified) is a reference to London time.
 
1.3                                         Headings    Section, Clause and Schedule headings are for ease of reference only.
 
1.4                                         Defined terms    Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
 
1.5                                         Default    A Default (other than an Event of Default) is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived.
 
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1.6                                         Currency symbols and definitions    “ $ ”, “ USD ” and “ dollars ” denote the lawful currency of the United States of America.
 
1.7                                         Third party rights    A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the “ Third Parties Act ”) to enforce or to enjoy the benefit of any term of this Agreement.
 
1.8                                         Offer letter    This Agreement supersedes the terms and conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between any Finance Party and the Borrowers or their representatives before the date of this Agreement.
 
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Section 2                                              The Loan
 
2                                                   The Loan
 
2.1                                         Amount    Subject to the terms of this Agreement, the Lenders agree to make available to the Borrowers on a joint and several basis a term loan in an aggregate amount not exceeding the Original Maximum Loan Amount and, subject to the provisions of Clause 2.2 ( Increase ), the Maximum Loan Amount.
 
2.2                                         Increase
 
2.2.1                              The Borrowers may submit an Increase Request on or before 30 June 2015 or at any subsequent time during the Facility Period as may be acceptable to the Arranger, provided that (a) there shall be no more than two increases of the Commitments in accordance with the provisions of this Clause 2.2 during the Facility Period and each increase will be of an amount that does not exceed 50% of the aggregate Market Value of the Additional Vessels that are provided as security for such Increase Request and (b) the Total Commitments cannot be more than $150,000,000.
 
2.2.2                              Any increase of the Commitments of a Lender pursuant to this Clause 2.2 shall be subject to the approval of that Lender (acting in its absolute discretion). Nothing in this Agreement or the other Finance Documents shall be read or construed as (a) imposing an obligation on any Lender to approve any Increase Request OR (b) prohibiting an increase of the Commitments of a Lender in accordance with the provisions of this Clause 2.2 (subject always to the approval of that Lender (acting in its absolute discretion)) if one of the other Lenders do not approve an increase of their respective Commitments requested pursuant to the relevant Increase Request.  The Arranger and the Security Parties shall collaborate and shall use reasonable efforts to procure that (a) one or more Lenders (other than ABN AMRO Capital USA LLC) approve an increase of their respective Commitments and/or (b) one or more banks or financial institutions (each such entity listed in (a) or (b) being an “ Increase Lender ”) becomes a Lender and assumes a Commitment (up to the Maximum Loan Amount in aggregate), as requested pursuant to the relevant Increase Request, but the Arranger shall have no further obligations in this respect (including but not limited to an obligation to procure that ABN AMRO Capital USA LLC (as Lender) approves an increase of its Commitment).
 
2.2.3                              Subject always to the provisions of this Clause 2.2, the increased Commitments will be assumed by one or more Increase Lenders, each of which shall confirm in writing (in the relevant Increase Confirmation) that it assumes all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender.
 
2.2.4                              Each Security Party and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Security Parties and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender.
 
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2.2.5                              Each Increase Lender shall become a Party as a “Lender” and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender.
 
2.2.6                              Following the increase of any Commitment pursuant to this Clause 2.2, the Commitments of the other Lenders shall continue in full force and effect.
 
2.2.7                              Any increase in any Commitment shall take effect on the date specified in the Increase Confirmation or any later date on which the conditions set out in Clause 2.2.8 are satisfied.
 
2.2.8                              An increase in the Commitments of an Increase Lender will only be effective on:
 
(a)                                          the execution by the Agent of an Increase Confirmation from the relevant Increase Lender;
 
(b)                                          the owner of the relevant Additional Vessel becoming an Additional Borrower in accordance with the provisions of Clause 24.2 ( Additional Borrowers );
 
(c)                                           satisfaction of all the conditions set out in Clause 24.2 ( Additional Borrowers ); and
 
(d)                                          the Agent being satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender. The Agent shall promptly notify the Increase Lender, the other Lenders and the Borrowers upon being so satisfied,
 
Provided always that (i) such an increase is proposed in relation to working capital or the financing or refinancing the whole or part of the aggregate purchase price of a Purchased Vessel and (ii) if the Total Commitments are increased the Borrowers shall provide security over Additional Vessels in an amount not less than two hundred per cent (200%) of such increase in Total Commitment in favour of the Security Agent in accordance with the provisions of this Agreement and subject always to such security being satisfactory (in form and substance) to all the Lenders.
 
2.2.9                              Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective.
 
2.2.10                       The Borrowers shall promptly on demand pay the Agent and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by either of them and, in the case of the Security Agent, by any Receiver or Delegate in connection with any increase in Commitments under this Clause 2.2.
 
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2.2.11                       Clause 23.4 ( Limitation of responsibility of Existing Lenders ) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to:
 
(a)                                          an “Existing Lender” were references to all the Lenders immediately prior to the relevant increase;
 
(b)                                          the “New Lender” were references to that “Increase Lender”; and
 
(c)                                           a “re-transfer” and “re-assignment” were references to respectively a “transfer” and “assignment”.
 
2.3                                         Finance Parties’ rights and obligations
 
2.3.1                              The obligations of each Finance Party under the Finance Documents are several.  Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents.  No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
 
2.3.2                              The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from a Security Party shall be a separate and independent debt.
 
2.3.3                              A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
 
3                                                   Purposes
 
Purposes    The Borrowers shall apply the Loan towards financing or refinancing the whole or part of the purchase price of one or more Purchased Vessels and/or general working capital requirements, provided that not more than fifty per cent (50%) of the Loan shall be used to finance or refinance part of the purchase price of one or more Purchased Vessels.
 
3.1                                         Monitoring    No Finance Party is bound to monitor or verify the application of any amount borrowed under this Agreement.
 
4                                                   Conditions of Utilisation
 
4.1                                         Initial conditions precedent
 
4.1.1                              The Lenders will only be obliged to comply with Clause 5.3 ( Lenders’ participation ) in relation to the advance of a Drawing if, on or before the relevant Drawdown Date, the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Agent, save that references in Section 2 of that Part I to “the Vessel” or to any person or document relating to a Vessel shall be deemed to relate solely to the Vessel specified in the relevant Drawdown Request or to any person or document relating to that Vessel respectively.  The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied.
 
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4.1.2                              Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause 4.1.1, the Lenders authorise (but do not require) the Agent to give that notification.  The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
 
4.2                                         Conditions precedent in respect of an Increase Request
 
4.2.1                              The Lenders will only be obliged to comply with Clause 5.3 ( Lenders’ participation ) in relation to the advance of a Drawing in relation to an Increase Request if, on or before the relevant Drawdown Date in respect of that Increase Request, the Agent has received all of the documents and other evidence listed in Part III of Schedule 2 ( Conditions Precedent in respect of an Increase Request ) in form and substance satisfactory to the Agent.  The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied.
 
4.2.2                              Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause 4.2.1, the Lenders authorise (but do not require) the Agent to give that notification.  The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
 
4.3                                         Further conditions precedent   The Lenders will only be obliged to advance a Drawing if on the date of the relevant Drawdown Request and on the proposed Drawdown Date:
 
4.3.1                              no Default is continuing or would result from the advance of that Drawing; and
 
4.3.2                              the representations made by each Borrower under Clause 18 ( Representations ) and by the Guarantor in Clause 6 ( Representations and Warranties ) of the Guarantee are true in all material respects.
 
4.4                                         Drawing limit   The Lenders will only be obliged to advance a Drawing if:
 
4.4.1                              no other Drawing has been made on the same Business Day;
 
4.4.2                              that Drawing will not result in there being more than eight Drawings outstanding at any one time, provided that if any repayments of Drawings are synchronised then subsequent Drawings shall constitute only one new Drawing;
 
4.4.3                              that Drawing is not less than $2,000,000;
 
4.4.4                              that Drawing will not increase the outstanding amount of the Loan to a sum in excess of the Original Maximum Loan Amount as increased pursuant to Clause 2.2 ( Increase ); and
 
4.4.5                              that Drawing will not increase the outstanding amount of the Loan advanced or to be advanced in respect of any Purchased Vessels to a sum in excess of fifty per cent (50%) of the amount of the Loan advanced and remaining outstanding.
 
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4.5                                         Reduction of Original Maximum Loan Amount
 
The Original Maximum Loan Amount as increased pursuant to Clause 2.2 ( Increase ):
 
4.5.1                              shall be reduced on each Reduction Date the relevant amount specified in the Reduction Profile; and
 
4.5.2                              may (in addition to any reduction under Clause 4.5.1) be reduced by the Borrowers by $2,500,000 or an integral multiple of that amount with effect from any Business Day by written notice to the Agent given not fewer than 14 days prior to that Business Day, which notice shall be irrevocable.
 
4.6                                         Conditions subsequent    The Borrowers undertake to deliver or to cause to be delivered to the Agent within 30 days after the relevant Drawdown Date the additional documents and other evidence listed in Part II of Schedule 2 ( Conditions Subsequent ), save that references in that Part II to “the Vessel” or to any person or document relating to a Vessel shall be deemed to relate solely to the Vessel specified in the relevant Drawdown Request or to any person or document relating to that Vessel respectively.
 
4.7                                         Conditions subsequent in respect of an Increase Request   The Additional Borrowers undertake to deliver or to cause to be delivered to the Agent within 30 days after the relevant Drawdown Date in respect of an Increase Request the additional documents and other evidence listed in Part IV of Schedule 2 ( Conditions Subsequent ).
 
4.8                                         No waiver    If the Lenders in their sole discretion agree to advance a Drawing to the Borrowers before all of the documents and evidence required by Clause 4.1 ( Initial conditions precedent ) have been delivered to or to the order of the Agent, the Borrowers undertake to deliver all outstanding documents and evidence to or to the order of the Agent no later than the date specified by the Agent (acting on the instructions of all the Lenders).
 
The advance of a Drawing under this Clause 4.8 shall not be taken as a waiver of the Lenders’ right to require production of all the documents and evidence required by Clause 4.1 ( Initial conditions precedent ).
 
4.9                                         Form and content    All documents and evidence delivered to the Agent under this Clause shall:
 
4.9.1                              be in form and substance acceptable to the Agent; and
 
4.9.2                              if required by the Agent, be certified, notarised, legalised or attested in a manner acceptable to the Agent.
 
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Section 3                                              Utilisation
 
5                                                   Advance
 
5.1                                         Delivery of a Drawdown Request    The Borrowers may request a Drawing to be advanced by delivery to the Agent of a duly completed Drawdown Request not more than ten and not fewer than three Business Days before the proposed Drawdown Date.
 
5.2                                         Completion of a Drawdown Request    A Drawdown Request is irrevocable and will not be regarded as having been duly completed unless:
 
5.2.1                              it is signed by an authorised signatory of each Borrower;
 
5.2.2                              the proposed Drawdown Date is a Business Day within the Availability Period; and
 
5.2.3                              the proposed Interest Period complies with Clause 9 ( Interest Periods ).
 
5.3                                         Lenders’ participation
 
5.3.1                              Subject to Clauses 2 ( The Loan ), 3 ( Purpose ) and 4 ( Conditions of Utilisation ), each Lender shall make its participation in any Drawing available by the relevant Drawdown Date through its Facility Office.
 
5.3.2                              The amount of each Lender’s participation in any Drawing will be equal to the proportion borne by its Commitment to the Total Commitments.
 
5.4                                         Cancellation of Commitment    The Total Commitments shall be cancelled at the end of the Availability Period to the extent that they are unutilised at that time.
 
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Section 4                                              Repayment, Prepayment and Cancellation
 
6                                                   Repayment
 
6.1                                         Repayment of each Drawing    The Borrowers agree to repay each Drawing to the Agent for the account of the Lenders on the last day of the Interest Period in respect of that Drawing and if that Interest Period is longer than three months, on the date falling at three monthly intervals after the first day of that Interest Period.
 
6.2                                         Application of new Drawings    Without prejudice to the Borrowers’ obligation under Clause 6.1 ( Repayment of each Drawing ), if:
 
6.2.1                              one or more Drawings are to be made available to the Borrowers:
 
(a)                                          on the same day that a maturing Drawing is due to be repaid by the Borrowers; and
 
(b)                                          in whole or in part for the purpose of refinancing the maturing Drawing; and
 
6.2.2                              the proportion borne by each Lender’s participation in the maturing Drawing to the amount of that maturing Drawing is the same as the proportion borne by that Lender’s participation in the new Drawings to the aggregate amount of those new Drawings,
 
the aggregate amount of the new Drawings shall, unless the Borrowers notify the Agent to the contrary in the relevant Drawdown Request, be treated as if applied in or towards repayment of the maturing Drawing so that:
 
(a)                                          if the amount of the maturing Drawing exceeds the aggregate amount of the new Drawings:
 
(i)                                               the Borrowers will only be required to make a payment under Clause 28.1 ( Payments to the Agent ) in an amount in the relevant currency equal to that excess; and
 
(ii)                                            each Lender’s participation in the new Drawings shall be treated as having been made available and applied by the Borrowers in or towards repayment of that Lender’s participation in the maturing Drawing and that Lender will not be required to make a payment under Clause 28.1 ( Payments to the Agent ) in respect of its participation in the new Drawing; and
 
(b)                                          if the amount of the maturing Drawing is equal to or less than the aggregate amount of the new Drawings:
 
(i)                                               the Borrowers will not be required to make a payment under Clause 28.1 ( Payments to the Agent ); and
 
(ii)                                            each Lender will be required to make a payment under Clause 28.1 ( Payments to the Agent ) in respect of its participation in the new Drawings only to the extent that its participation in the new Drawings exceeds that Lender’s participation in the maturing Drawing and the remainder
 
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of that Lender’s participation in the new Drawings shall be treated as having been made available and applied by the Borrowers in or towards repayment of that Lender’s participation in the maturing Drawing.
 
6.3                                         Request for Drawing   Upon the day that a maturing Drawing is due to be repaid the Borrowers shall be deemed to have provided a request for a Drawing in an equivalent amount on such date for such Interest Period as they may select or be deemed to select pursuant to Clause 9 ( Interest Periods ) unless the Borrowers advise otherwise at the time they select such Interest Period.
 
6.4                                         Reborrowing   Amounts of the Loan which are repaid or prepaid shall be available for reborrowing in accordance with Clause 4 ( Conditions of Utilisation ) prior to the end of the Availability Period.
 
7                                                   Illegality, Prepayment and Cancellation
 
7.1                                         Illegality    If it becomes unlawful in any jurisdiction (other than by reason of Sanctions) for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:
 
7.1.1                              that Lender shall promptly notify the Agent upon becoming aware of that event;
 
7.1.2                              upon the Agent notifying the Borrowers, the Commitment of that Lender will be immediately cancelled; and
 
7.1.3                              the Borrowers shall repay that Lender’s participation in any Drawing on the last day of its current Interest Period or, if earlier, the date specified by that Lender in the notice delivered to the Agent and notified by the Agent to the Borrowers (being no earlier than the last day of any applicable grace period permitted by law) and the Original Maximum Loan Amount as increased pursuant to Clause 2.2 ( Increase ) shall be reduced by the amount of that Lender’s Commitment in the Loan.
 
7.2                                         Voluntary cancellation    The Borrowers may, if they give the Agent not less than ten Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of $2,500,000 or an integral multiple thereof) of the undrawn amount of the Loan.  Any cancellation under this Clause 7.2 shall reduce the Commitments of the Lenders on a pro rata basis.  Any cancellation under this Clause 7.3 shall be applied on a pro rata basis across all reductions of the Loan including any payment at final maturity.
 
7.3                                         Voluntary prepayment of Drawings    The Borrowers may prepay the whole or any part of a Drawing (but, if in part, being an amount that reduces that Drawing by $2,500,000 or an integral multiple thereof) provided that they give the Agent not less than ten Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice.
 
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7.4                                         Right of cancellation and prepayment in relation to a single Lender
 
7.4.1                              If:
 
(a)                                          any sum payable to any Lender by the Borrowers is required to be increased under Clause 12.2.2 ( Tax gross-up ); or
 
(b)                                          any Lender claims indemnification from the Borrowers under Clause 12.3 ( Tax indemnity ) or Clause 13.1 ( Increased costs ),
 
the Borrowers may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment(s) of that Lender and their intention to procure the repayment of that Lender’s participation in each Drawing.
 
7.4.2                              On receipt of a notice referred to in Clause 7.4.1 in relation to a Lender, the Commitment(s) of that Lender shall immediately be reduced to zero.
 
7.4.3                              On the last day of the Interest Period in respect of each Drawing which ends after the Borrowers have given notice under Clause 7.4.1 in relation to a Lender (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Lender’s participation in that Drawing together with all interest and other amounts accrued under the Finance Documents.
 
7.5                                         Mandatory prepayment on sale or Total Loss    If a Vessel is sold by a Borrower or becomes a Total Loss, the Loan shall, simultaneously with any such sale or on the earlier of the date falling 180 days after any such Total Loss and the date on which the proceeds of any such Total Loss are realised, be reduced by the same proportion as the Market Value of the Vessel owned by the relevant Borrower bears to the aggregate of the Market Value of all the Vessels (such values to be determined in accordance with Clause 17.14 ( Additional security )).  The Borrowers shall, simultaneously with that reduction, prepay one or more outstanding Drawings to the extent required to ensure that the aggregate amount of the Drawings outstanding does not exceed the Original Maximum Loan Amount as increased pursuant to Clause 2.2 ( Increase ).  Any prepayment under this Clause 7.5 shall satisfy the obligations under Clause 6.1 ( Repayment of each Drawing ) in inverse order of maturity.
 
7.6                                         Mandatory prepayment on Change of Control
 
7.6.1                              If there is a Change of Control in respect of the Guarantor, the Lenders shall have the right to instruct the Agent to (a) notify the Borrowers that the Total Commitments are cancelled, at which time they shall immediately be cancelled and/or (b) request that the Borrowers prepay the Loan in full. Within seven (7) Business Days of receipt of the instructions referred to in (b), the Borrowers shall prepay the Loan in full.
 
7.6.2                              If there is a Change of Control in respect of a Borrower, the Lenders shall have the right to instruct the Agent to: (a) request that the Borrowers prepay an amount which shall reduce the Loan by the same proportion as the Market Value of any Vessel bears to the aggregate of the Market Value of all the Vessels (such values to be determined in accordance with Clause 17.14 ( Additional security )) and/or (b) notify the Borrowers that the Total
 
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Commitment that relates to the Vessel owned by the relevant Borrower are cancelled and the Total Commitment shall be reduced in an amount equivalent to the reduction of the Loan pursuant to Clause 7.6.2(a).
 
7.7                                         Mandatory prepayment on reduction of Original Maximum Loan Amount
 
If the Original Maximum Loan Amount as increased pursuant to Clause 2.2 ( Increase ) is reduced in accordance with Clause 4.5 ( Reduction of Original Maximum Loan Amount ) to an amount which is less than the aggregate amount of the Drawings then outstanding, the Borrowers shall, simultaneously with that reduction, prepay one or more outstanding Drawings to the extent required to ensure that the aggregate amount of the Drawings outstanding does not exceed the reduced Original Maximum Loan Amount as increased pursuant to Clause 2.2 ( Increase ).
 
7.8                                         Right of cancellation in relation to a Defaulting Lender    If any Lender becomes a Defaulting Lender, the Borrowers may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 7 Business Days’ notice of cancellation of the Commitment of that Lender.  On that notice becoming effective, the Commitment of the Defaulting Lender shall immediately be reduced to zero.  The Agent shall as soon as practicable after receipt of that notice notify all the Lenders.
 
7.9                                         Restrictions    Any notice of prepayment or cancellation given under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant prepayment or cancellation is to be made and the amount of that prepayment or cancellation.
 
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.
 
The Borrowers shall not repay, prepay or cancel all or any part of the Loan except at the times and in the manner expressly provided for in this Agreement.
 
No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
 
If the Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice to the Borrowers or the affected Lender, as appropriate.
 
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Section 5                                              Costs of Utilisation
 
8                                                   Interest
 
8.1                                         Calculation of interest    The rate of interest on each Drawing for the Interest Period in respect of that Drawing is the percentage rate per annum which is the aggregate of the applicable:
 
8.1.1                              Margin; and
 
8.1.2                              LIBOR.
 
8.2                                         Payment of interest    The Borrowers shall pay accrued interest on each Drawing on the last day of the Interest Period in respect of that Drawing (and, if the Interest Period is longer than three months, on the dates falling at three monthly intervals after the first day of the Interest Period).
 
8.3                                         Default interest    If the Borrowers fail to pay any amount payable by them under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which is two per cent per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Drawing in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably).  Any interest accruing under this Clause 8.3 shall be immediately payable by the Borrowers on demand by the Agent.
 
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.
 
8.4                                         Notification of rates of interest    The Agent shall promptly notify the Borrowers of the determination of a rate of interest under this Agreement.
 
9                                                   Interest Periods
 
9.1                                        Selection of Interest Periods    The Borrowers may select in a written notice to the Agent the duration of the Interest Period for each Drawing subject as follows:
 
9.1.1                              each notice is irrevocable and must be delivered to the Agent by the Borrowers not later than 11.00 a.m. on the Quotation Day;
 
9.1.2                              if the Borrowers fail to give a notice in accordance with Clause 9.1.1, the relevant Interest Period will, subject to Clause 9.3 ( Non-Business Days ), be three months;
 
9.1.3                              subject to this Clause 9, the Borrowers may select an Interest Period of three or six months or any other period agreed between the Borrowers and the Agent (acting on the instructions of all the Lenders) , provided that the Borrower may select a period of less than three months using the Costs of Funds Rate for the first Drawing ;
 
9.1.4                              an Interest Period shall not extend beyond the Termination Date; and
 
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9.1.5                              each Interest Period shall start on the Drawdown Date in respect of the Drawing and end on the date which numerically corresponds to the Drawdown Date in the relevant calendar month except that, if there is no numerically corresponding date in that calendar month, the Interest Period shall end on the last Business Day in that month.
 
9.2                                         Second and subsequent Drawings   If the second or any subsequent Drawing is made otherwise than on the first day of an Interest Period for the balance of the Loan, there shall be a separate initial Interest Period for that Drawing commencing on its Drawdown Date and expiring on the final date of the then current Interest Period for the balance of the Loan.
 
9.3                                         Non-Business Days    If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
 
10                                            Changes to the Calculation of Interest
 
10.1                                  Absence of quotations    Subject to Clause 10.2 ( Market disruption ), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11.00 am on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
 
10.2                                  Market disruption    If a Market Disruption Event occurs for any Interest Period, then the rate of interest on each Lender’s share of the relevant Drawing for that Interest Period shall be the percentage rate per annum which is the sum of:
 
10.2.1                       the Margin; and
 
10.2.2                       the rate notified to the Agent by that Lender as soon as practicable, and in any event by close of business on the date falling three Business Days after the Quotation Day (or, if earlier, on the date falling three Business Days prior to the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the relevant Drawing from whatever source it may reasonably select.
 
In this Agreement “ Market Disruption Event ” means:
 
(a)                                          at or about noon on the Quotation Day for the relevant Interest Period LIBOR is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for dollars and the relevant Interest Period; or
 
(b)                                          before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the relevant Drawing exceed 50 per cent of that Drawing) that the cost to it of funding its participation in that Drawing from whatever source it may reasonably select would be in excess of LIBOR.
 
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10.3                                  Alternative basis of interest or funding
 
10.3.1                       If a Market Disruption Event occurs and the Agent or the Borrowers so require, the Agent and the Borrowers shall enter into negotiations (for a period of not more than thirty fifteen days) with a view to agreeing a substitute basis for determining the rate of interest.
 
10.3.2                       Any alternative basis agreed pursuant to Clause 10.3.1 shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.
 
10.4                                  Break Costs    The Borrowers shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Drawing or Unpaid Sum being paid by the Borrowers on a day other than the last day of an Interest Period for that Drawing or Unpaid Sum.
 
Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.
 
11                                            Fees
 
11.1                                  Commitment Fee    The Borrowers shall pay to the Agent (for the account of the Lenders in proportion to their Commitments) a fee computed at the rate of 1.5 per cent per annum on the undrawn amount of the Original Maximum Loan Amount for the Availability Period.
 
The accrued commitment fee is payable on the last day of each successive period of three months which ends during the Availability Period, on the last day of the Availability Period and (on the cancelled amount of the relevant Lender’s Commitment) at the time the cancellation is effective.
 
11.2                                  Other Fees    The Borrowers shall pay to the relevant party any other fees specified in the relevant Fee Letters at the times and in the amounts specified therein.
 
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Section 6                                              Additional Payment Obligations
 
12                                            Tax Gross Up and Indemnities
 
12.1                                  Definitions    In this Agreement:
 
“ Protected Party ” means a Finance Party which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
 
“ Tax Credit ” means a credit against, relief or remission for, or repayment of any Tax.
 
“ Tax Deduction ” means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.
 
“ Tax Payment ” means either the increase in a payment made by a Security Party to a Finance Party under Clause 12.2 ( Tax gross-up ) or a payment under Clause 12.3 ( Tax indemnity ).
 
Unless a contrary indication appears, in this Clause 12 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.
 
12.2                                  Tax gross-up    Each Borrower shall (and shall procure that each other Security Party shall) make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law, subject as follows:
 
12.2.1                       a Borrower shall promptly upon becoming aware that it or any other Security Party must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly.  Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender.  If the Agent receives such notification from a Lender it shall notify the Borrowers and any such other Security Party;
 
12.2.2                       if a Tax Deduction is required by law to be made by a Borrower or any other Security Party, the amount of the payment due from that Borrower or that other Security Party shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required;
 
12.2.3                       if a Borrower or any other Security Party is required to make a Tax Deduction, that Borrower shall (and shall procure that such other Security Party shall) make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law;
 
12.2.4                       within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower making that Tax Deduction shall (and shall procure that such other Security Party shall) deliver to the Agent for the Finance Party entitled to the payment evidence
 
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reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
 
12.3                                  Tax indemnity
 
12.3.1                       Each Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
 
12.3.2                       Clause 12.3.1 shall not apply:
 
(a)                                          with respect to any Tax assessed on a Finance Party:
 
(i)                                               under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
 
(ii)                                            under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,
 
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
 
(b)                                          to the extent a loss, liability or cost:
 
(i)                                               is compensated for by an increased payment under Clause 12.2 ( Tax gross-up ); or
 
(ii)                                            relates to a FATCA Deduction required to be made by a Party.
 
12.3.3                       A Protected Party making, or intending to make a claim under Clause 12.3.1 shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrowers.
 
12.3.4                       A Protected Party shall, on receiving a payment from a Borrower under this Clause 12.3, notify the Agent.
 
12.4                                  Tax Credit    If a Borrower or any other Security Party makes a Tax Payment and the relevant Finance Party determines that:
 
12.4.1                       a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and
 
12.4.2                       that Finance Party has obtained and utilised that Tax Credit,
 
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that Finance Party shall pay an amount to that Borrower or to that other Security Party which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been made by that Borrower or that other Security Party.
 
12.5                                  Stamp taxes    The Borrowers shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
 
12.6                                  VAT
 
12.6.1                       All amounts expressed to be payable under a Finance Document by any Party or any Security Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to Clause 12.6.2, if  VAT is or becomes chargeable on any supply made by any Finance Party to any Party or any Security Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party or Security Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to the Borrowers).
 
12.6.2                       If VAT is or becomes chargeable on any supply made by any Finance Party (the “ Supplier ”) to any other Finance Party (the “ Recipient ”) under a Finance Document, and any Party other than the Recipient (the “ Relevant Party ”) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
 
(a)                                          (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT.  The Recipient must (where this Clause 12.6.2(a) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and
 
(b)                                          (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.
 
12.6.3                       Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of
 
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such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
 
12.6.4                       Any reference in this Clause 12.6 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the Value Added Tax Act 1994).
 
12.6.5                       In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party’s VAT registration and such other information as is reasonably requested in connection with such Finance Party’s VAT reporting requirements in relation to such supply.
 
12.7                                  FATCA information
 
12.7.1                       Subject to Clause 12.7.3, each Party shall, within ten Business Days of a reasonable request by another Party:
 
(a)                                          confirm to that other Party whether it is:
 
(i)                                               a FATCA Exempt Party; or
 
(ii)                                            not a FATCA Exempt Party;
 
(b)                                          supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA; and
 
(c)                                           supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other law, regulation, or exchange of information regime.
 
12.7.2                       If a Party confirms to another Party pursuant to Clause 12.7.1(a)(i) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
 
12.7.3                       Clause 12.7.1 shall not oblige any Finance Party to do anything, and Clause 12.7.1(c) shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:
 
(a)                                          any law or regulation;
 
(b)                                          any fiduciary duty; or
 
(c)                                           any duty of confidentiality.
 
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12.7.4                       If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with Clause 12.7.1(a) or 12.7.1(b) (including, for the avoidance of doubt, where Clause 12.7.3 applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
 
12.7.5                       If a Borrower is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten Business Days of:
 
(a)                                          where a Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;
 
(b)                                          where a Borrower is a US Tax Obligor on a Transfer Date and the relevant Lender is a New Lender or an Increase Lender, the relevant Transfer Date; or
 
(c)                                           where a Borrower is not a US Tax Obligor, the date of a request from the Agent,
 
supply to the Agent:
 
(i)                                               a withholding certificate on Form W-8 or Form W-9 or any other relevant form; or
 
(ii)                                            any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.
 
12.7.6                       The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause 12.7.5 to the Borrowers.
 
12.7.7                       If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to Clause 12.7.5 is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent).  The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrowers.
 
12.7.8                       The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause 12.7.5 or 12.7.7 without further verification.  The Agent shall not be liable for any action taken by it under or in connection with Clause 12.7.5, 12.7.6 or 12.7.7.
 
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12.8                                  FATCA Deduction
 
12.8.1                       Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
 
12.8.2                       Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Borrowers and the Agent and the Agent shall notify the other Finance Parties.
 
13                                            Increased Costs
 
13.1                                  Increased costs    Subject to Clause 13.3 ( Exceptions ) the Borrowers shall, within three Business Days of a demand by the Agent, pay to the Agent for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation or any request from or requirement of any central bank or other fiscal, monetary or other authority made after the date of this Agreement (including Basel III and Dodd Frank and any other which relates to capital adequacy or liquidity controls or which affects the manner in which that Finance Party allocates capital resources to obligations under this Agreement) or (iii) any change in the risk weight allocated by that Finance Party to the Borrowers after the date of this Agreement.
 
In this Agreement “ Increased Costs ” means:
 
(a)                                           a reduction in the rate of return from the Loan or on a Finance Party’s (or its Affiliate’s) overall capital;
 
(b)                                           an additional or increased cost; or
 
(c)                                            a reduction of any amount due and payable under any Finance Document,
 
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into any Finance Document or funding or performing its obligations under any Finance Document.
 
In this Agreement “ Basel III ” means:
 
(a)                                           the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
 
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(b)                                           the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement — Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
 
(c)                                            any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.
 
In this Agreement “ Dodd Frank ” means the Dodd-Frank Wall Street Reform and Consumer Protection Act of the U.S.A and all requests, rules, guidelines or directives thereunder or issued in connection therewith.
 
13.2                                  Increased cost claims
 
13.2.1                       A Finance Party intending to make a claim pursuant to Clause 13.1 ( Increased costs ) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrowers.
 
13.2.2                       Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.
 
13.3                                  Exceptions    Clause 13.1 ( Increased costs ) does not apply to the extent any Increased Cost is:
 
13.3.1                       attributable to a Tax Deduction required by law to be made by a Borrower;
 
13.3.2                       attributable to a FATCA Deduction required to be made by a Party;
 
13.3.3                       compensated for by Clause 12.3 ( Tax indemnity ) (or would have been compensated for under Clause 12.3 but was not so compensated solely because any of the exclusions in Clause 12.3 applied);
 
13.3.4                       attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; or
 
13.3.5                       attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (“ Basel II ”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).
 
In this Clause 13.3, a reference to a “ Tax Deduction ” has the same meaning given to the term in Clause 12.1 ( Definitions ).
 
14                                            Other Indemnities
 
14.1                                  Currency indemnity    If any sum due from a Borrower or the Guarantor under the Finance Documents (a “ Sum ”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “ First Currency ”) in
 
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which that Sum is payable into another currency (the “ Second Currency ”) for the purpose of:
 
14.1.1                       making or filing a claim or proof against that Borrower or the Guarantor (as the case may be), or
 
14.1.2                       obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
that Borrower shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (a) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to that Finance Party at the time of its receipt of that Sum.
 
Each Borrower waives and shall procure that the Guarantor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
 
14.2                                  Other indemnities
 
14.2.1                       The Borrowers shall, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:
 
(a)                                          the occurrence of any Event of Default;
 
(b)                                          a failure by a Borrower to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 27 ( Sharing among the Finance Parties );
 
(c)                                           funding, or making arrangements to fund, a Drawing following delivery by the Borrowers of a Drawdown Request but that Drawing not being advanced by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by a Finance Party alone); or
 
(d)                                          a Drawing (or part of a Drawing) not being prepaid in accordance with a notice of prepayment given by the Borrowers.
 
14.2.2                       The Borrowers shall promptly indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 an “ Indemnified Person ”) against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Encumbrance constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, a Vessel, unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.
 
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14.2.3                       Subject to any limitations set out in Clause 14.2.2, the indemnity in that Clause shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:
 
(a)                                          arising or asserted under or in connection with any breach of law by Borrowers or an Affilate relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or
 
(b)                                          in connection with any Environmental Claim.
 
14.3                                  Indemnity to the Agent    The Borrowers shall promptly indemnify the Agent against:
 
14.3.1                       any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:
 
(a)                                          investigating any event which it reasonably believes is a Default; or
 
(b)                                          acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
 
(c)                                           instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and
 
14.3.2                       any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 28.12 ( Disruption to Payment Systems etc .) notwithstanding the Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent under the Finance Documents.
 
14.4                                  Indemnity to the Security Agent    The Borrowers shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:
 
14.4.1                       any failure by the Borrowers to comply with their obligations under Clause 16 ( Costs and Expenses );
 
14.4.2                       acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
 
14.4.3                       the taking, holding, protection or enforcement of the Security Documents;
 
14.4.4                       the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;
 
14.4.5                       any default by any Security Party in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or
 
14.4.6                       acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property
 
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(otherwise, in each case, than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct).
 
14.5                                  Indemnity survival    The indemnities contained in this Agreement shall survive repayment of the Loan.
 
15                                            Mitigation by the Lenders
 
15.1                                  Mitigation    Each Finance Party shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in all or any part of the Loan ceasing to be available or any amount becoming payable under or pursuant to any of Clause 7.1 ( Illegality ), Clause 12 ( Tax Gross Up and Indemnities ) or Clause 13 ( Increased Costs ) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.  The above does not in any way limit the obligations of any Security Party under the Finance Documents.
 
15.2                                  Limitation of liability    The Borrowers shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 ( Mitigation ).  A Finance Party is not obliged to take any steps under Clause 15.1 if, in its opinion (acting reasonably), to do so might be prejudicial to it.
 
16                                            Costs and Expenses
 
16.1                                  Transaction expenses    The Borrowers shall promptly on demand pay the Agent, the Security Agent and the Arranger the amount of all costs and expenses (including legal fees) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with:
 
16.1.1                       the negotiation, preparation, printing, execution, syndication and perfection of this Agreement and any other documents referred to in this Agreement;
 
16.1.2                       the negotiation, preparation, printing, execution and perfection of any other Finance Documents executed after the date of this Agreement;
 
16.1.3                       any other document which may at any time be required by a Finance Party to give effect to any Finance Document or which a Finance Party is entitled to call for or obtain under any Finance Document (including, without limitation, any valuation of a Vessel); and
 
16.1.4                       any discharge, release or reassignment of any of the Security Documents.
 
16.2                                  Amendment costs    If (a) a Security Party requests an amendment, waiver or consent or (b) an amendment is required under Clause 28.11 ( Change of currency ), the Borrowers shall, within three Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.
 
16.3                                  Agent and Security Agent’s management time and additional remuneration    Any amount payable to the Agent under Clause 14.3 ( Indemnity to the Agent ) or to
 
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the Security Agent under Clause 14.4 ( Indemnity to the Security Agent ) or to either of them under this Clause 16 or Clause 25.11 ( Lenders’ indemnity to the Agent ) shall include the cost of utilising the management time or other resources of the Agent or the Security Agent (as the case may be) and will be calculated on the basis of such reasonable daily or hourly rates as the Agent or the Security Agent may notify to the Borrowers and the Lenders, and is in addition to any other fee paid or payable to the Agent or the Security Agent.
 
16.4                                  Enforcement and preservation costs    The Borrowers shall, within three Business Days of demand, pay to each Finance Party and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Security Documents or enforcing those rights including (without limitation) any losses, costs and expenses which that Finance Party or other Secured Party may from time to time sustain, incur or become liable for by reason of that Finance Party or other Secured Party being mortgagee of a Vessel and/or a lender to a Borrower, or by reason of that Finance Party or other Secured Party being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Vessel.
 
16.5                                  Other costs    The Borrowers shall, within three Business Days of demand, pay to each Finance Party and each other Secured Party the amount of all sums which that Finance Party or other Secured Party may pay or become actually or contingently liable for on account of a Borrower in connection with a Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which that Finance Party or other Secured Party may pay or guarantees which it may give in respect of the Insurances, any expenses incurred by that Finance Party or other Secured Party in connection with the maintenance or repair of a Vessel or in discharging any lien, bond or other claim relating in any way to a Vessel, and any sums which that Finance Party or other Secured Party may pay or guarantees which it may give to procure the release of a Vessel from arrest or detention.
 
Section 7                                              Security and Application of Moneys
 
17                                           Security Documents and Application of Moneys
 
17.1                                  Security Documents    As security for the payment of the Indebtedness, the Borrowers shall execute and deliver to the Security Agent or cause to be executed and delivered to the Security Agent (and in the case of any Additional Vessels, as a conditions precedent to an increase in the Commitments pursuant to Clause 2.2 ( Increase )) the following documents in such forms and containing such terms and conditions as the Security Agent shall require:
 
17.1.1                       first preferred or priority statutory mortgages over the Original Vessels (and in the case of an increase in the Commitments pursuant to Clause 2.2 ( Increase ), the Additional Vessels), together with (if applicable) collateral deeds of covenant;
 
17.1.2                       first priority deeds of assignment of the Insurances, Earnings, Charters and Requisition Compensation of the Original Vessels (and in the case of an
 
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increase in the Commitments pursuant to Clause 2.2 ( Increase ), the Additional Vessels), from the Borrowers;
 
17.1.3                       a guarantee and indemnity from the Guarantor;
 
17.1.4                       a first priority deed or deeds of charge or pledge (as applicable) in respect of all amounts from time to time standing to the credit of the Accounts and an account control agreement or agreements providing for the “control” (as such term is used in Article 9 of the UC of the State of New York) of the Accounts by the Security Agent; and
 
17.1.5                       first priority charges of all the issued shares of the Borrowers.
 
17.2                                  Earnings Accounts    The Borrowers shall maintain the Accounts with the Account Holder for the duration of the Facility Period free of Encumbrances and rights of set off other than those created by or under the Finance Documents.
 
17.3                                  Earnings    Each Borrower shall procure that all Earnings (after deduction only of Operating Expenses) and any Requisition Compensation in respect of its Vessel are credited to the relevant Earnings.  Transfers between Earnings Accounts are permitted.
 
17.4                                  Debt Service Reserve   The Debt Service Reserve shall be used to meet shortfalls in debt service provided that the Borrowers have exhausted all other lines of available liquidity and the Borrowers shall maintain the Debt Service Reserve in the Earnings Account for m.v. “GENCO COMMODUS” (or such other earnings account as may be agreed by the Lenders from time to time) or in available but undrawn working capital lines, provided that no Debt Service Reserve will be required to be maintained from 7 April 2017 and for the remaining Facility Period if at any time on or after 7 April 2017 the VTL Coverage is tested (i) there is no Default which is continuing, (ii) all the covenants set out in Clause 20 ( Financial Covenants ) are complied with and (iii) the VTL Coverage is at least 175%.  For the purposes of this Clause only, the VTL Coverage shall be tested on the amount of the Loan then outstanding and any undrawn Commitments.
 
17.5                                  Borrowers’ obligations not affected    If for any reason the amount standing to the credit of the Accounts is insufficient to repay any Drawing or to make any payment of interest when due, the Borrowers’ obligation to repay that Drawing or to make that payment of interest shall not be affected.
 
17.6                                 Release of surplus    Subject always to the satisfaction of the minimum liquidity requirements set out in Clause 20.1 ( Financial covenants ) in respect of each and all Earnings Accounts, any amount remaining to the credit of each Earnings Account shall (unless a Default is continuing) be released to or to the order of the Borrowers.
 
17.7                                  Restriction on withdrawal    During the Facility Period no sum may be withdrawn from the Accounts (except in accordance with this Clause 17) without the prior written consent of the Security Agent.  The Accounts shall not be overdrawn.
 
17.8                                  Relocation of Accounts    On and at any time after the occurrence of a Default which is continuing, the Security Agent may without the consent of the Borrowers instruct the Account Holder to relocate either or both of the Accounts to any other
 
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branch of the Account Holder, without prejudice to the continued application of this Clause 17 and the rights of the Finance Parties under the Finance Documents.
 
17.9                                  Access to information    The Borrowers agree that the Security Agent (and its nominees) may from time to time during the Facility Period review the records held by the Account Holder (whether in written or electronic form) in relation to the Accounts, and irrevocably waive any right of confidentiality which may exist in relation to those records.
 
17.10                           Statements    Without prejudice to the rights of the Security Agent under Clause 17.9 ( Access to information ), the Borrowers shall procure that the Account Holder provides to the Security Agent, no less frequently than each calendar month during the Facility Period, written statements of account showing all entries made to the credit and debit of each of the Accounts during the immediately preceding calendar month.
 
17.11                           Application after acceleration    From and after the giving of notice to the Borrowers by the Agent under Clause 22.1.22(a) ( Acceleration ), the Borrowers shall procure that all sums from time to time standing to the credit of either of the Accounts are immediately transferred to the Security Agent or any Receiver or Delegate for application in accordance with Clause 17.12 ( Application of moneys by Security Agent ) and the Borrowers irrevocably authorise the Security Agent to instruct the Account Holder to make those transfers.
 
17.12                           Application of moneys by Security Agent    The Borrowers and the Finance Parties irrevocably authorise the Security Agent or any Receiver or Delegate to apply all moneys which it receives and is entitled to receive:
 
17.12.1                          pursuant to a sale or other disposition of a Vessel or any right, title or interest in a Vessel; or
 
17.12.2                          by way of payment of any sum in respect of the Insurances, Earnings or Requisition Compensation; or
 
17.12.3                          by way of transfer of any sum from either of the Accounts; or
 
17.12.4                          otherwise under or in connection with any Security Document,
 
in or towards satisfaction of the Indebtedness in the following order:
 
17.12.5                          first, any unpaid fees, costs, expenses and default interest due to the Agent and the Security Agent (and, in the case of the Security Agent, to any Receiver or Delegate) under all or any of the Finance Documents, such application to be apportioned between the Agent and the Security Agent pro rata to the aggregate amount of such items due to each of them;
 
17.12.6                          second, any unpaid fees, costs, expenses (including any sums paid by the Lenders under Clause 25.11 ( Indemnity )) of the Lenders due under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such items due to each of them;
 
17.12.7                          third, any accrued but unpaid default interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders
 
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pro rata to the aggregate amount of such default interest due to each of them;
 
17.12.8                          fourth, any other accrued but unpaid interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such interest due to each of them;
 
17.12.9                          fifth, any principal of the Loan due and payable but unpaid under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such principal due to each of them; and
 
17.12.10                   sixth, any other sum due and payable to any Finance Party but unpaid under all or any of the Finance Documents, such application to be apportioned between the Finance Parties pro rata to the aggregate amount of any such sum due to each of them;
 
Provided that the balance (if any) of the moneys received shall be paid to the Security Parties from whom or from whose assets those sums were received or recovered or to any other person entitled to them.
 
17.13                           Retention on account    Moneys to be applied by the Security Agent or any Receiver or Delegate under Clause 17.12 ( Application of moneys by Security Agent ) shall be applied as soon as practicable after the relevant moneys are received by it, or otherwise become available to it, save that (without prejudice to any other provisions contained in any of the Security Documents) the Security Agent or any Receiver or Delegate may retain any such moneys by crediting them to a suspense account for so long and in such manner as the Security Agent or such Receiver or Delegate may from time to time determine with a view to preserving the rights of the Finance Parties or any of them to prove for the whole of the Indebtedness (or any relevant part) against the Borrowers or any of them or any other person liable.
 
17.14                           Additional security    If at any time the aggregate of the Market Value of the Vessels and the value of any additional security provided pursuant to this Clause 17.14 determined conclusively by appropriate advisers appointed by the Agent (in the case of other charged assets), and determined by the Agent in its discretion (in all other cases)) for the time being provided to the Security Agent under this Clause 17.14 is less than 140% of the amount of the Loan then outstanding, less any cash amounts standing to the credit of the Debt Service Account (the “ VTL Coverage ”), the Borrowers shall, within 30 days of the Agent’s request, at the Borrower’s option:
 
17.14.1                pay to the Security Agent or to its nominee a cash deposit in the amount of the shortfall to be secured in favour of the Security Agent as additional security for the payment of the Indebtedness; or
 
17.14.2                give to the Security Agent other additional security in amount and form acceptable to the Security Agent in its discretion, it being agreed that security over Fleet Vessels with an Approved Flag is security acceptable to the Security Agent; or
 
17.14.3                prepay one or more outstanding Drawings to the extent required to eliminate the shortfall.
 
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Any prepayment made under this Clause 17.14 shall satisfy the obligations under Clause 6.1 ( Repayment of each Drawing ) in inverse order of maturity. Clause 7.9 ( Restrictions ) shall apply, mutatis mutandis , to any prepayment made under this Clause 17.14.  The value of any additional security provided shall in the case of cash deposit be the face amount of the deposit, in the case of a Vessel be determined in the same manner as the Market Value of the Vessels and in the case of other security shall be determined by the Agent in its absolute discretion.
 
If, at any time after the Borrowers have provided additional security in accordance with the Agent’s request under this Clause 17.14, the Agent shall determine when testing compliance with the VTL Coverage that all or any part of that additional security may be released without resulting in a shortfall in the VTL Coverage, then, provided that no Default is continuing, the Security Agent shall effect a release of all or any part of that additional security in accordance with the Agent’s instructions, but this shall be without prejudice to the Agent’s right to make a further request under this Clause 17.14 should the value of the remaining security subsequently merit it.
 
17.15                           Fleet Vessels The Fair Market Value of a Fleet Vessel (other than a Vessel) shall be determined, pursuant to any required methodology in accordance with any contractual obligation addressing the manner in which such Fleet Vessel is to be appraised or valued (or if there is no such other required methodology, in a manner mutually acceptable to the Borrowers and the Agent).
 
17.16                           Fleet Vessels Valuations  Notwithstanding the terms contained in Clause 17.15 ( Fleet Vessels ), all valuations of any Fleet Vessel shall be made on the basis of a charter-free sale for prompt delivery for cash at arm’s length, on normal commercial terms as between a willing buyer and a willing seller by an Approved Shipbroker or such approved shipbrokers as defined in other loan facilities to the Guarantor or any other member of the Group.
 
17.17                           Cost of valuations The VTL Coverage in respect of each Vessel shall be determined semi-annually in each calendar year on the second and fourth Quarter Date commencing from 30 June 2015, in each case at the cost of the Borrowers.  The Fair Market Value of the Fleet Vessels shall be determined for the purposes of determining the Value Adjusted Total Assets quarterly (based on semi-annual valuations in each calendar year to be taken on the second and fourth Quarter Date) commencing from 30 June 2015, in each case at the cost of the Borrowers.
 
The Agent shall, however, be at liberty to assess, at no cost to the Borrowers, the VTL Coverage in respect of each Vessel at any time during the Facility Period and at such frequency as the Agent shall think necessary in its absolute discretion, unless a Default which is continuing has occurred or a mandatory prepayment event as detailed in Clause 7.5 ( Mandatory prepayment on Sale or Total Loss ) has occurred or if the Lender proves a shortfall in the VTL Coverage in which circumstance the Borrowers shall be responsible for all costs and expenses incurred by the Agent in obtaining any valuations for the purposes of assessing such values.
 
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Section 8                                              Representations, Undertakings and Events of Default
 
18                                            Representations
 
18.1                                  Representations    Each Borrower makes, and shall procure the Guarantor shall make, the representations and warranties set out in this Clause 18 to each Finance Party.
 
18.1.1                       Status    Each of the Security Parties:
 
(a)                                          is a limited liability corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation; and
 
(b)                                          has the power to own its assets and carry on its business as it is being conducted.
 
18.1.2                       Binding obligations    Subject to the Legal Reservations:
 
(a)                                          the obligations expressed to be assumed by each of the Security Parties in each of the Relevant Documents to which it is a party are legal, valid, binding and enforceable obligations; and
 
(b)                                          (without limiting the generality of Clause 18.1.2(a)) each Security Document to which it is a party creates the security interests which that Security Document purports to create and those security interests are valid and effective.
 
18.1.3                       Non-conflict with other obligations    The entry into and performance by each of the Security Parties of, and the transactions contemplated by, the Relevant Documents do not conflict with:
 
(a)                                          any law or regulation applicable to such Security Party;
 
(b)                                          the constitutional documents of such Security Party; or
 
(c)                                           any agreement or instrument binding upon such Security Party or any of such Security Party’s assets or constitute a default or termination event (however described) under any such agreement or instrument.
 
18.1.4                       Power and authority
 
(a)                                          Each of the Security Parties has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Relevant Documents to which it is or will be a party and the transactions contemplated by those Relevant Documents.
 
(b)                                          No limit on the powers of any Security Party will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Relevant Documents to which it is a party.
 
18.1.5                       Validity and admissibility in evidence    All Authorisations required or desirable:
 
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(a)                                          to enable each of the Security Parties lawfully to enter into, exercise its rights and comply with its obligations in the Relevant Documents to which it is a party or to enable each Finance Party to enforce and exercise all its rights under the Relevant Documents; and
 
(b)                                          to make the Relevant Documents to which any Security Party is a party admissible in evidence in its Relevant Jurisdictions,
 
have been obtained or effected and are in full force and effect, with the exception only of the registrations referred to in Part II of Schedule 2 ( Conditions Subsequent ).
 
18.1.6                       Governing law and enforcement
 
(a)                                          The choice of governing law of any Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Security Party.
 
(b)                                          Any judgment obtained in relation to any Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Security Party.
 
18.1.7                       Insolvency    No corporate action, legal proceeding or other procedure or step described in Clause 22.1.7 ( Insolvency proceedings ) or creditors’ process described in Clause 22.1.8 ( Creditors’ process ) has been taken or, to the knowledge of any Borrower, threatened in relation to a Security Party; and none of the circumstances described in Clause 22.1.6 ( Insolvency ) applies to a Security Party.
 
18.1.8                       No filing or stamp taxes    Under the laws of the Relevant Jurisdictions of each relevant Security Party it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in any of those jurisdictions or that any stamp, registration, notarial or similar tax or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except registration of each Mortgage at the Ships Registry where title to the relevant Vessel is registered in the ownership of the relevant Borrower and payment of associated fees, which registrations, filings, taxes and fees will be made and paid promptly after the date of the relevant Finance Document.
 
18.1.9                       No default
 
(a)                                          No Event of Default and, on the date of this Agreement and each Drawdown Date, no Default is continuing or is reasonably likely to result from the advance of a Drawing or the entry into, the performance of, or any transaction contemplated by, any of the Relevant Documents.
 
(b)                                          No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (howsoever described) under any other agreement or instrument which is binding on any of the Security Parties or
 
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to which its assets are subject which has or is reasonably likely to have a Material Adverse Effect.
 
18.1.10                No misleading information    Save as disclosed in writing to the Agent and the Arranger prior to the date of this Agreement (or, in relation to the Information Memorandum, prior to the date of the Information Memorandum):
 
(a)                                          any factual information contained in the Information Memorandum was true and accurate in all material respects as at the date of the relevant report or document containing the information or (as the case may be) as at the date the information is expressed to be given;
 
(b)                                          any financial projection or forecast contained in the Information Memorandum has been prepared on the basis of recent historical information and on the basis of reasonable assumptions and was fair (as at the date of the relevant report or document containing the projection or forecast) and arrived at after careful consideration;
 
(c)                                           the expressions of opinion or intention provided by or on behalf of any of the Security Parties for the purposes of the Information Memorandum were made after careful consideration and (as at the date of the relevant report or document containing the expression of opinion or intention) were fair and based on reasonable grounds;
 
(d)                                          no event or circumstance has occurred or arisen and no information has been omitted from the Information Memorandum and no information has been given or withheld that results in the information, opinions, intentions, forecasts or projections contained in the Information Memorandum being untrue or misleading in any material respect;
 
(e)                                           all material information provided to a Finance Party by or on behalf of any of the Security Parties on or before the date of this Agreement and not superseded before that date is accurate and not misleading in any material respect and all projections provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied; and
 
(f)                                            all other written information provided by any of the Security Parties (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect.
 
18.1.11                Financial statements
 
(a)                                          The Original Financial Statements were prepared in accordance with GAAP consistently applied.
 
(b)                                          The unaudited Original Financial Statements fairly represent each Security Party’s and the Group’s financial condition and results of operations for the relevant financial quarter.
 
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(c)                                           The audited Original Financial Statements give a true and fair view of the Guarantor’s financial condition and results of operations during the relevant financial year.
 
(d)                                          There has been no material adverse change in any Security Party’s assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Parent) since the date of the Original Financial Statements.
 
(e)                                           Each Security Party’s most recent financial statements delivered pursuant to Clause 19.1 ( Financial statements ):
 
(i)                                               have been prepared in accordance with GAAP as applied to the Original Financial Statements; and
 
(ii)                                            give a true and fair view of (if audited) or fairly represent (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate.
 
(f)                                            Since the date of the most recent financial statements delivered pursuant to Clause 19.1 ( Financial statements ) there has been no material adverse change in the business, assets or financial condition of any of the Security Parties or any other member of the Group.
 
18.1.12                No proceedings pending or threatened    No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any of the Security Parties.
 
18.1.13                No breach of laws    None of the Security Parties has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
 
18.1.14                Environmental laws
 
(a)                                          Each of the Security Parties is in compliance with Clause 21.3 ( Environmental compliance ) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.
 
(b)                                          No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any of the Security Parties where that claim has or is reasonably likely, if determined against that Security Party, to have a Material Adverse Effect.
 
18.1.15                Taxation
 
(a)                                          None of the Security Parties is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax.
 
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(b)                                          No claims or investigations are being, or are reasonably likely to be, made or conducted against any of the Security Parties with respect to Taxes.
 
(c)                                           Each of the Security Parties is resident for Tax purposes only in its Original Jurisdiction.
 
18.1.16                Anti-corruption law    Each of the Security Parties and each Affiliate of any of them has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
 
18.1.17                No Encumbrance or Financial Indebtedness
 
(a)                                          No Encumbrance exists over all or any of the present or future assets of any Borrower.
 
(b)                                          No Borrower has any Financial Indebtedness outstanding other than as permitted by this Agreement.
 
18.1.18                Pari passu ranking    The payment obligations of each of the Security Parties under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
 
18.1.19                No adverse consequences
 
(a)                                          It is not necessary under the laws of the Relevant Jurisdictions of any of the Security Parties:
 
(i)                                               in order to enable any Finance Party to enforce its rights under any Finance Document; or
 
(ii)                                            by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document,
 
that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of the Relevant Jurisdictions of any of the Security Parties.
 
(b)                                          No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any of the Relevant Jurisdictions of any of the Security Parties  by reason only of the execution, performance and/or enforcement of any Finance Document.
 
18.1.20                Disclosure of material facts    No Borrower is aware of any material facts or circumstances which have not been disclosed to the Agent and which might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrowers.
 
18.1.21                Completeness of Relevant Documents    The copies of any Relevant Documents provided or to be provided by the Borrowers to the Agent in
 
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accordance with Clause 4 ( Conditions of Utilisation ) are, or will be, true and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those Relevant Documents in relation to the subject matter of those Relevant Documents and there are no commissions, rebates, premiums or other payments due or to become due in connection with the subject matter of those Relevant Documents other than in the ordinary course of business or as disclosed to, and approved in writing by, the Agent.
 
18.1.22                No Immunity    No Security Party or any of its assets is immune to any legal action or proceeding.
 
18.1.23                Money laundering    Any borrowing by a Borrower under this Agreement, and the performance of its obligations under this Agreement and under the other Finance Documents, will be for its own account and will not involve any breach by it of any law or regulatory measure relating to “ money laundering ” as defined in Article 1 of the Directive (2005/EC/60) of the European Parliament and of the Council of the European Communities.
 
18.1.24                Sanctions    As regards Sanctions:
 
(a)                                          None of the Security Parties or any Affiliate of any of them is a Restricted Person or is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Restricted Person and none of such persons owns or controls a Restricted Person.
 
(b)                                          No proceeds of the Loan shall be made available, directly or indirectly, to or for the benefit of a Restricted Person in violation applicable Sanctions laws, or otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.
 
(c)                                           Each of the Security Parties and each Affiliate of any of them is in material compliance with all applicable Sanctions.
 
18.2                                  Repetition    Each Repeating Representation is deemed to be repeated by each Borrower by reference to the facts and circumstances then existing on the date of each Drawdown Request, on each Drawdown Date, on the first day of each Interest Period and, in the case or those contained in Clauses 18.1.11(d) and 18.1.11(f) ( Financial statements ) and for so long as any amount is outstanding under the Finance Documents or any Commitment is in force, on each day.
 
19                                           Information Undertakings
 
The undertakings in this Clause 19 remain in force for the duration of the Facility Period.
 
19.1                                  Financial statements    The Borrowers shall procure that the Guarantor shall supply to the Agent as soon as the same become available, but in any event within ninety (90) days after the end of each of its financial years:
 
19.1.1                       the Guarantor’s audited consolidated (so as to include inter alia the Borrowers and Baltic Trading Limited and its Subsidiaries) financial statements for that financial year;
 
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19.1.2                       Baltic Trading Limited’s audited consolidated financial statements for that financial year (if applicable);
 
19.1.3                       the Guarantor’s unaudited financial statements for that financial year (including the Borrowers and the other Subsidiaries of the Borrower but excluding Baltic Trading Limited and its Subsidiaries) together with the calculations and documentation that the Agent and the Security Agent may deem necessary in order to make the necessary reconciliations and off-setting against the financial statements referred to in Clause 19.1.1 and 19.1.2 above; and
 
19.1.4                       each Borrower’s annual management accounts (balance sheet and profit and loss accounts) at the time that the relevant Compliance Certificate is presented pursuant to Clause 19.3 ( Compliance Certificate ).
 
19.2                                  Interim financial statements   The Borrowers shall procure that the Guarantor shall, and shall procure that each Borrower shall, supply to the Agent as soon as the same become available, but in any event within forty five (45) days after the end of each quarter during each of its financial years:
 
19.2.1                       the Guarantor’s consolidated (so as to include inter alia the Borrowers and Baltic Trading Limited and its Subsidiaries) quarterly financial statements for that quarter;
 
19.2.2                       Baltic Trading Limited’s unaudited consolidated financial statements for that quarter (if applicable);
 
19.2.3                       the Guarantor’s unaudited financial statements for that quarter (including the Borrowers and the other Subsidiaries of the Guarantor but excluding Baltic Trading Limited and its Subsidiaries) together with the calculations and documentation that the Agent and the Security Agent may deem necessary in order to make the necessary reconciliations and off-setting against the financial statements referred to in Clause 19.2.1 and 19.2.2 above; and
 
19.2.4                       each Borrower’s quarterly management accounts (balance sheet and profit and loss accounts) at the time that the relevant Compliance Certificate is presented pursuant to Clause 19.3 ( Compliance Certificate ).
 
19.3                                  Compliance Certificate
 
19.3.1                       The Borrowers shall procure that the Guarantor shall supply to the Agent, with each set of its annual financial statements delivered pursuant to Clause 19.1 ( Financial statements ) and each set of its quarterly financial statements delivered pursuant to Clause 19.1 ( Financial statements ), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 20 ( Financial Covenants ) as at the date as at which those financial statements were drawn up.
 
19.3.2                       The Borrowers shall procure that each Compliance Certificate shall be signed by an authorised officer of the Guarantor.
 
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19.3.3                       The Borrowers shall procure that if prior to the delivery of any Compliance Certificate by the Guarantor, the Guarantor becomes aware that the financial covenants detailed in Clause 20 ( Financial Covenants ) (or any of them) will not be complied with, the Borrowers shall promptly notify the Agent accordingly.
 
19.4                                  Requirements as to financial statements
 
Each set of financial statements delivered by the Chief Financial Officer under Clause 19.1 ( Financial statements ):
 
19.4.1                       shall be certified by the Chief Financial Officer as giving a true and fair view of (in the case of annual financial statements), or fairly representing (in other cases), its financial condition as at the date as at which those financial statements were drawn up;
 
19.4.2                       shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Agent:
 
(a)                                          a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and
 
(b)                                          sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Agent to determine whether Clause 20 ( Financial Covenants ) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.
 
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
 
19.5                                  Information: miscellaneous    Each Borrower shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests, except in the case of Clause 19.5.1 where such documents are publicly filed with the SEC):
 
19.5.1                       at the same time as they are dispatched, copies of all documents dispatched by that Borrower to its shareholders generally (or any class of them) or dispatched by that Borrower or any other Security Party to its creditors generally (or any class of them);
 
19.5.2                       promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Security Party, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;
 
19.5.3                       promptly, such information as the Security Agent may reasonably require about the Charged Property and compliance of the Security Parties with the terms of any Security Documents including without limitation cash flow
 
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analyses and details of the operating costs of any Vessel and annual inspection certificates (including any annual inspection report (if required by the Agent); and
 
19.5.4                       promptly on request, such further information regarding the financial condition, assets and operations of any Security Party (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Security Party under this Agreement and an up to date copy of its shareholders’ register (or equivalent in its Original Jurisdiction)) as any Finance Party through the Agent may reasonably request.
 
19.6                                  Notification of default
 
19.6.1                       Each Borrower shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.
 
19.6.2                       Promptly upon a request by the Agent, each Borrower shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
 
19.7                                  “Know your customer” checks
 
19.7.1                       If:
 
(a)                                          the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
 
(b)                                          any change in the status of a Security Party after the date of this Agreement; or
 
(c)                                           a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
 
obliges the Agent or any Lender (or, in the case of Clause 19.7.1(c), any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Borrower shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in Clause 19.7.1(c), on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in Clause 19.7.1(c), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
 
19.7.2                       Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably
 
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requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
 
19.7.3                       The Borrowers shall, by not less than ten Business Days’ prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of the intention to request that any other member of the Group becomes an Additional Borrower pursuant to Clause 24 ( Changes to the Security Parties )
 
19.7.4                       Following the giving of any notice pursuant to Clause 19.7.3, if the accession of such Additional Borrower obliges the Agent or any Lender to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrowers shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the accession of such member of the Group to this Agreement as an Additional Borrower.
 
19.8                                  USA Patriot Act Notice   Each Lender hereby notifies each Borrower that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub.: 107-56 (signed into law October 26, 2001) (the “ Patriot Act ”) it is required to obtain, verify, and record information that identifies each Borrower, which information includes the name of each Borrower and other information that will allow such Lender to identify each Borrower in accordance with the Patriot Act, and each Borrower agrees to provide such information from time to time to any Lender.
 
20                                            Financial Covenants
 
20.1                                  At each and all times during the Facility Period, the Borrowers shall maintain cash in the Earnings Accounts for m.v. “GENCO COMMODUS” free of Encumbrances (other than in favour of the Security Agent) in an amount of not less than $750,000 per mortgaged Vessel which is subject to a Mortgage in favour of the Security Agent.
 
20.2                                  At each and all times during the Facility Period the Borrowers shall procure that the Guarantor shall, in respect of the Guarantor only:
 
(a)                                          maintain cash and Cash Equivalents (including available but undrawn working capital lines with an availability period of more than 6 months) in an amount of not less than $750,000 per Fleet Vessel of which a minimum amount of $25,000,000 shall be in Cash and Cash Equivalents (excluding available working capital lines); and
 
(b)                                          not permit its maximum Leverage to exceed seventy per cent (70%); and
 
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(c)                                           not permit its Consolidated Net Worth to be less than the Minimum Consolidated Net Worth,
 
which covenants shall be tested upon receipt of the interim financial statements delivered to the Agent pursuant to Clause 19.2 ( Interim financial statements ) for a period ending on each Quarter Date for the first three Quarter Dates in each financial year and on the final Quarter Date in each calendar year upon receipt of the annual financial statements delivered pursuant to Clause 19.1.1 ( Financial Statements ).
 
20.3                                  In the event that any member of the Group enters into a revolving or term loan facility in respect of the Vessels with other lenders or financial institutions (where such loan facility has a structure that is considered usual and customary of a ship finance facility), on terms and conditions such that any financial covenants analogous to the covenants set out in Clause 20.1 or Clause 20.2 or the margin under such loan facility are, in the Agent’s opinion, on more favourable terms to those lenders or financial institutions, the Borrowers and the Guarantor undertake to provide the same terms and conditions to the Finance Parties on the terms and conditions to be agreed between the Agent (acting on the instructions of all the Lenders), the Borrowers and the Guarantor.  In addition, should the lenders or financial institutions under other existing loan facilities (outstanding at the time of signing of this Agreement) to the Guarantor or any other member of the Group not provide a waiver of certain covenants that the Guarantor has requested, such covenants shall apply under this Agreement on the terms and conditions to be agreed between the Agent (acting on the instructions of the Lenders), the Borrowers and the Guarantor.
 
21                                            General Undertakings
 
The undertakings in this Clause 21 remain in force for the duration of the Facility Period.
 
21.1                                  Authorisations    Each Borrower shall, and shall procure that the Guarantor shall, promptly:
 
21.1.1                       obtain, comply with and do all that is necessary to maintain in full force and effect; and
 
21.1.2                       supply certified copies to the Agent of,
 
any Authorisation required under any law or regulation of a Relevant Jurisdiction to:
 
(a)                                          enable any Security Party to perform its obligations under the Finance Documents to which it is a party;
 
(b)                                          ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and
 
(c)                                           enable any Security Party to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.
 
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21.2                                  Compliance with laws
 
21.2.1                       Each Borrower shall, and shall procure that the Guarantor shall comply (and shall procure that each other Security Party and each Affiliate of any of them shall comply), in all respects with all laws to which it may be subject, if (except as regards Sanctions, to which Clause 21.2.2 applies, and anti-corruption laws, to which Clause 21.5 applies) failure so to comply has or is reasonably likely to have a Material Adverse Effect.
 
21.2.2                       Each Borrower shall, and shall procure that Guarantor shall, comply (and shall procure that each other Security Party and each Affiliate of any of them shall comply) in all respects with all Sanctions.
 
21.3                                  Environmental compliance
 
Each Borrower shall, and shall procure that the Guarantor shall:
 
21.3.1                       comply with all Environmental Laws;
 
21.3.2                       obtain, maintain and ensure compliance with all requisite Environmental Approvals; and
 
21.3.3                       implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
 
where failure to do so has or is reasonably likely to have a Material Adverse Effect.
 
21.4                                  Environmental Claims
 
Each Borrower shall, and shall procure that the Guarantor shall, promptly upon becoming aware of the same, inform the Agent in writing of:
 
21.4.1                       any Environmental Claim against any of the Security Parties which is current, pending or threatened; and
 
21.4.2                       any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Security Parties,
 
where the claim, if determined against that Security Party, has or is reasonably likely to have a Material Adverse Effect.
 
21.5                                 Anti-corruption law
 
21.5.1                       Each Borrower shall, and shall procure that the Guarantor shall not (and shall procure that no other Security Party will) directly or indirectly use the proceeds of the Loan for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.
 
21.5.2                       Each Borrower shall, and shall procure that the Guarantor shall (and shall procure that each other Security Party shall):
 
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(a)                                          conduct its businesses in material compliance with applicable anti-corruption laws; and
 
(b)                                          maintain policies and procedures designed to promote and achieve compliance with such laws.
 
21.6                                  Taxation
 
21.6.1                       Each Borrower shall, and shall procure that the Guarantor shall (and shall procure that each other Security Party shall) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
 
(a)                                          such payment is being contested in good faith;
 
(b)                                          adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 19.1 ( Financial statements ); and
 
(c)                                           such payment can be lawfully withheld and, in the case of the Guarantor only, failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
 
21.6.2                       No Borrower and no other Security Party may change its residence for Tax purposes.
 
21.7                                  Evidence of good standing    Each Borrower will from time to time if requested by the Agent provide the Agent with evidence in form and substance satisfactory to the Agent that the Security Parties and all corporate shareholders of any of the Security Parties remain in good standing.
 
21.8                                  Pari passu ranking    Each Borrower shall, and shall procure that the Guarantor shall, ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
 
21.9                                  Negative pledge
 
In this Clause 21.9 “ Quasi-Security ” means an arrangement or transaction described in Clause 21.9.2.
 
Except as permitted under Clause 21.9.3:
 
21.9.1                       No Borrower shall create nor permit to subsist any Encumbrance over any of its assets.
 
21.9.2                       No Borrower shall:
 
(a)                                          sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a Security Party or any other member of the Group;
 
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(b)                                          sell, transfer or otherwise dispose of any of its receivables on recourse terms;
 
(c)                                           enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
 
(d)                                          enter into any other preferential arrangement having a similar effect,
 
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
 
21.9.3                       Clauses 21.9.1 and 21.9.2 do not apply to any Encumbrance or (as the case may be) Quasi-Security, which is a Permitted Encumbrance or a Permitted Transaction.
 
21.10                           Disposals
 
21.10.1                Except as permitted under Clause 21.10.2, no Borrower shall enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
 
21.10.2                Clause 21.10.1 does not apply to any sale, lease, transfer or other disposal which is a Permitted Transaction.
 
21.11                           Arm’s length basis
 
21.11.1                Except as permitted under Clause 21.11.2, no Borrower shall, and shall procure the Guarantor shall not enter into any transaction with any person except on arm’s length terms and for full market value.
 
21.11.2                The following transactions shall not be a breach of this Clause 21.11:
 
(a)                                          fees, costs and expenses payable under the Relevant Documents in the amounts set out in the Relevant Documents delivered to the Agent under Clause 4.1 ( Initial conditions precedent ) or agreed by the Agent;
 
(b)                                          any Permitted Transaction and any Permitted Loan;
 
(c)                                           customary director’s fees consistent with past practice.
 
(d)                                          employment agreements in the ordinary course of business; and
 
(e)                                           management fees received by the Guarantor, in the ordinary course of business and in line with market practice .
 
21.12                           Merger    No Borrower shall, and the Borrowers shall procure the Guarantor shall not, without the prior written consent of the Lenders (such consent not to be unreasonably withheld), enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction other than a Permitted Transaction.
 
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21.13                           Change of business    No Borrower shall and the Borrowers shall procure the Guarantor shall not, make any substantial change to the general nature of its business from that carried on at the date of this Agreement.
 
21.14                           No other business    No Borrower shall (and the Borrowers shall procure that no other Security Party (other than the Guarantor) will) engage in any business other than the ownership, operation, chartering and management of the relevant Vessel.
 
21.15                           No acquisitions    No Borrower shall acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) or incorporate a company.
 
21.16                           No Joint Ventures    No Borrower shall:
 
21.16.1                           enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or
 
21.16.2                           transfer any assets or lend to or guarantee or give an indemnity for or give security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing).
 
21.17                           No borrowings    No Borrower shall incur or allow to remain outstanding any Financial Indebtedness (except for the Loan) unless it is a Permitted Transaction or a Permitted Loan.
 
21.18                           No substantial liabilities    Except in the ordinary course of business, no Borrower shall incur any liability to any third party which is in the Agent’s opinion of a substantial nature.
 
21.19                           No loans or credit    No Borrower shall be a creditor in respect of any Financial Indebtedness unless it is a loan made in the ordinary course of business in connection with the chartering, operation or repair of the relevant Vessel or a Permitted Transaction or a Permitted Loan.
 
21.20                           No guarantees or indemnities    No Borrower shall incur or allow to remain outstanding any guarantee in respect of any obligation of any person unless it is a Permitted Transaction.
 
21.21                           No dividends
 
21.21.1                Except as permitted under Clause 21.21.2, the Borrower shall procure the Guarantor shall not:
 
(a)                                          declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital);
 
(b)                                          repay or distribute any dividend or share premium reserve; or
 
(c)                                           redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so.
 
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21.21.2                Clause 21.21.1 does not apply:
 
(a)                                          to a Permitted Transaction (other than one referred to in (b) of the definition of that term); and
 
(b)                                          in respect of the period from 7 April 2017 and for the remaining Facility Period, provided that if at any such time more than fifty per cent (50%) of the amount of the Loan has been advanced and remains outstanding, any dividend, charge, fee or other distribution detailed in Clause 21.21.1(a) or Clause 21.21.1(b) made by the Guarantor shall not exceed 50% of the Net Income of the Guarantor;
 
(c)                                           so long as the Borrowers are in compliance until the provisions of this Agreement, the Guarantor may authorise, declare and distribute a dividend of rights (as such term is defined and which are convertible into other securities as set forth in the Shareholder Rights Agreement) as contemplated by the Shareholder Rights Agreement.
 
21.22                           Inspection of records    Each Borrower will, and shall procure the Guarantor will, permit the inspection of its financial records and accounts as may be reasonably required from time to time by the Agent or its nominee.
 
21.23                           No change in Relevant Documents    No Borrower shall (and the Borrowers shall procure that no other Security Party will) amend, vary, novate, supplement, supersede, waive or terminate any term of, any of the Relevant Documents which are not Finance Documents, or any other document delivered to the Agent pursuant to Clause 4.1 ( Initial conditions precedent ) or Clause 4.2 ( Further conditions precedent ) or Clause 4.6 ( Conditions subsequent ) other than in relation to (i) a time charter or other contract of employment which is not capable of exceeding eighteen (18) months duration and (ii) non-material alterations to the terms of the Management Agreements (in respect of which (i) and (ii) no consent shall be required), provided there is no Default.
 
21.24                           Further assurance
 
21.24.1                Each Borrower shall (and shall procure that each other Security Party shall) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):
 
(a)                                          to perfect any Encumbrance created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;
 
(b)                                          to confer on the Security Agent or confer on the Finance Parties an Encumbrance over any property and assets of that Borrower (or that other
 
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Security Party as the case may be) located in any jurisdiction equivalent or similar to the Encumbrance intended to be conferred by or pursuant to the Security Documents; and/or
 
(c)                                           to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents.
 
21.24.2                Each Borrower shall (and shall procure that each other Security Party shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Encumbrance conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents.
 
21.25                           Compliance with laws   Each Borrower shall, and shall procure the Guarantor shall materially comply in all respects with all applicable Sanctions.
 
21.26                           Sanctions
 
21.26.1                Each Borrower and the Guarantor undertakes that it and each director, officer, agent, employee or person acting on behalf of the Borrowers or the Guarantor, is not a Restricted Person and is not owned, controlled, or an agent of  a Restricted Person.
 
21.26.2                No Borrower nor the Guarantor shall use any revenue or benefit derived from any activity or dealing with a Restricted Person in breach of Sanctions in discharging any obligation due or owing to the Finance Parties.
 
21.26.3                Each Borrower and the Guarantor shall, to the extent permitted by law, promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or formal investigation against it brought by any Sanctions Authority, with respect to the activities of Borrower or Guarantor
 
21.27                           Use of proceeds   The Borrowers shall not, and will procure the Guarantor shall not, and shall not permit or authorise any other person to, directly or indirectly, make available any proceeds of the Loan to fund or facilitate trade, business or other activities (i) involving or for the benefit of any Restricted Person in breach of Sanctions or (ii) in any other manner that could result in any Borrower or the Guarantor or a Finance Party being in breach of any Sanctions or becoming a Restricted Person.
 
22                                           Events of Default
 
22.1                                  Events of Default    Each of the events or circumstances set out in this Clause 22.1 is an Event of Default.
 
22.1.1                       Non-payment    A Security Party does not pay on the due date any amount payable by it under a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
 
(a)                                          its failure to pay is caused by:
 
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(i)                                               administrative or technical error; or
 
(ii)                                            a Disruption Event; and
 
(b)                                          payment is made within 3 Business Days of its due date (in the case of (a)(i)).
 
22.1.2                       Other specific obligations
 
(a)                                          Any requirement of Clause 20 ( Financial Covenants ) is not satisfied.
 
(b)                                          A Security Party does not comply with any obligation in a Finance Document relating to the Insurances or with Clause 17.14 ( Additional security ).
 
22.1.3                       Other obligations
 
(a)                                          A Security Party does not comply with any provision of a Finance Document (other than those referred to in Clause 22.1.1 ( Non-payment ), Clause 22.1.2 ( Other specific obligations ) and 22.1.22 ( Sanctions ).
 
(b)                                          No Event of Default under this Clause 22.1.3 will occur if the failure to comply is capable of remedy and is remedied within ten Business Days of the earlier of (i) the Agent giving notice to the Borrowers and (ii) the Borrowers becoming aware of the failure to comply.
 
22.1.4                       Misrepresentation    Any representation or statement made or deemed to be repeated by a Security Party in any Finance Document or any other document delivered by or on behalf of a Security Party under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made.
 
22.1.5                       Cross default    Any Financial Indebtedness of a Security Party:
 
(a)                                          is not paid when due nor within any originally applicable grace period; or
 
(b)                                          is declared to be, or otherwise becomes, due and payable prior to its specified maturity as a result of an event of default (however described); or
 
(c)                                           is capable of being declared by a creditor to be due and payable prior to its specified maturity as a result of such an event.
 
No Event of Default will occur under this Clause 22.1.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within (a) to (c) is less than $1,000,000 in respect of a Borrower and $10,000,000 in respect of the Guarantor (or in each case its equivalent in any other currency or currencies).
 
22.1.6                       Insolvency
 
(a)                                          A Security Party is unable or admits inability to pay its debts as they fall due, is deemed to, or is declared to, be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts, or, by reason of actual or anticipated financial difficulties,
 
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commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
 
(b)                                          The value of the assets of a Security Party is less than its liabilities (taking into account contingent and prospective liabilities).
 
(c)                                           A moratorium is declared in respect of any indebtedness of a Security Party.  If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
 
22.1.7                       Insolvency proceedings    Any corporate action, legal proceedings or other procedure or step is taken for:
 
(a)                                          the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of a Security Party;
 
(b)                                          a composition, compromise, assignment or arrangement with any creditor of a Security Party;
 
(c)                                           the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of a Security Party or any of its assets; or
 
(d)                                          enforcement of any Encumbrance over any assets of a Security Party,
 
or any analogous procedure or step is taken in any jurisdiction.
 
This Clause 22.1.7 shall not apply to (i) any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 30 days of commencement or (ii) any step or procedure contemplated by (b) of the definition of “Permitted Transaction”.
 
22.1.8                       Creditors’ process    Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Security Party having an aggregate value of $1,000,000.
 
22.1.9                       Unlawfulness and invalidity
 
(a)                                          It is or becomes unlawful for a Security Party to perform any of its obligations under the Finance Documents or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be effective.
 
(b)                                          Any obligation or obligations of any Security Party under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents.
 
(c)                                           Any Finance Document ceases to be in full force and effect or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be legal, valid, binding, enforceable or
 
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effective or is alleged by a party to it (other than a Finance Party) to be ineffective.
 
22.1.10                Cessation of business    A Security Party ceases, or threatens to cease, to carry on all or a substantial part of its business.
 
22.1.11                Expropriation    The authority or ability of a Security Party to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to a Security Party or any of its assets.
 
22.1.12                Repudiation and rescission of agreements
 
(a)                                          A Security Party rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance Document.
 
(b)                                          Subject to Clause 22.1.12(c), any party to any of the Relevant Documents that is not a Finance Document rescinds or purports to rescind or repudiates or purports to repudiate that Relevant Document in whole or in part where to do so has or is, in the reasonable opinion of the Majority Lenders, likely to have a material adverse effect on the interests of the Lenders under the Finance Documents.
 
(c)                                           Any of the Management Agreements or a Charter is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its contractual expiry date and is not immediately replaced by a similar agreement in form and substance satisfactory to the Majority Lenders.
 
22.1.13                Conditions subsequent    Any of the conditions referred to in Clause 4.6 ( Conditions subsequent ) is not satisfied within the time reasonably required by the Agent.
 
22.1.14                Revocation or modification of Authorisation    Any Authorisation of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable any of the Security Parties to comply with any of their obligations under any Relevant Document is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Agent considers is, or may be, prejudicial to the interests of any Finance Party, or ceases to remain in full force and effect.
 
22.1.15                Reduction of capital    A Borrower reduces its authorised or issued or subscribed capital.
 
22.1.16                Loss of Vessel    A Vessel suffers a Total Loss or is otherwise destroyed or abandoned, or a similar event occurs in relation to any other vessel which may from time to time be mortgaged to the Security Agent as security for the payment of all or any part of the Indebtedness, except that a Total Loss (which term shall for the purposes of the remainder of this Clause 22.1.16
 
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include an event similar to a Total Loss in relation to any other vessel) shall not be an Event of Default if:
 
(a)                                          that Vessel or other vessel is insured in accordance with the Security Documents and a claim for Total Loss is available under the terms of the relevant insurances; and
 
(b)                                          no insurer has refused to meet or has disputed the claim for Total Loss and it is not apparent to the Agent in its discretion that any such refusal or dispute is likely to occur; and
 
(c)                                           payment of all insurance proceeds in respect of the Total Loss is made in full to the Security Agent within 180 days of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Agent may in its discretion agree.
 
22.1.17                Challenge to registration    The registration of a Vessel or a Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or the validity or priority of a Mortgage is contested.
 
22.1.18                War    The country of registration of a Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Agent in its discretion considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced.
 
22.1.19                Notice of determination    A Guarantor gives notice to the Security Agent to determine any obligations under the Guarantee.
 
22.1.20                Litigation    Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Relevant Documents or the transactions contemplated in the Relevant Documents or against a Security Party or its assets which have or are reasonably likely to have a Material Adverse Effect.
 
22.1.21                Material adverse change    Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.
 
22.1.22                Sanctions
 
(a)                                          Any of the Security Parties or any Affiliate of any of them becomes a Restricted Person or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Restricted Person or any of such persons becomes the owner or controller of a Restricted Person.
 
(b)                                          Any proceeds of the Loan are made available, directly or indirectly, to or for the benefit of a Restricted Person or otherwise is, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.
 
(c)                                           Any of the Security Parties or any Affiliate of any of them is not in material compliance with all applicable Sanctions.
 
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22.2                                  Acceleration    On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders:
 
22.2.1                       by notice to the Borrowers cancel the Total Commitments, at which time they shall immediately be cancelled, provided that in the case of an Event of Default under either of Clauses 22.1.6 ( Insolvency ) and 22.1.7 ( Insolvency Proceedings ) the Total Commitments shall be deemed immediately cancelled without notice or demand therefor;
 
22.2.2                       by notice to the Borrowers declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents are immediately due payable, provided that in the case of an Event of Default under either of Clauses 22.1.6 ( Insolvency ) and 22.1.7 ( Insolvency Proceedings ) the Loan together with accrued interest and all other amounts accrued or outstanding under the Finance Documents shall be deemed immediately due and payable without notice or demand therefor;
 
22.2.3                       by notice to the Borrowers declare that the Loan is payable on demand, at which time it shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or
 
22.2.4                       exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.
 
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Section 9                                              Changes to Parties
 
23                                            Changes to the Lenders
 
23.1                                  Assignments and transfers by the Lenders    Subject to this Clause 23, a Lender (the “ Existing Lender ”) may:
 
23.1.1                       assign any of its rights; or
 
23.1.2                       transfer by novation any of its rights and obligations,
 
under any Finance Document to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “ New Lender ”).
 
23.2                                  Conditions of assignment or transfer
 
23.2.1                       An Existing Lender must consult with the Borrowers for no more than ten days before it may make an assignment or transfer in accordance with Clause 23.1 ( Assignments and transfers by the Lenders ) unless the assignment or transfer is:
 
(a)                                          to another Lender or an Affiliate of a Lender;
 
(b)                                          if the Existing Lender is a fund, to a fund which is a Related Fund of the Existing Lender; or
 
(c)                                           made at a time when an Event of Default is continuing.
 
23.2.2                       The consent of the Borrowers to an assignment or transfer must not be unreasonably withheld or delayed.  The Borrowers will be deemed to have given their consent ten Business Days after the Lender has requested it unless consent is expressly refused by the Borrowers within that time.
 
23.2.3                       An assignment will only be effective on:
 
(a)                                          receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender; and
 
(b)                                          performance by the Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender.
 
23.2.4                       A transfer will only be effective if the procedure set out in Clause 23.5 ( Procedure for transfer ) is complied with.
 
23.2.5                       If:
 
(a)                                          a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
 
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(b)                                          as a result of circumstances existing at the date the assignment, transfer or change occurs, a Borrower would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 ( Tax Gross Up and Indemnities ) or Clause 13 ( Increased costs ),
 
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.  This Clause 23.2.5 shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Loan.
 
23.2.6                       Each New Lender confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
 
23.3                                  Assignment or transfer fee    Unless the Agent otherwise agrees and excluding an assignment or transfer (i) to an Affiliate of a Lender, (ii) to a Related Fund or (iii) made in connection with primary syndication of the Loan, the New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of $3,000.
 
23.4                                  Limitation of responsibility of Existing Lenders
 
23.4.1                       Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
 
(a)                                          the legality, validity, effectiveness, adequacy or enforceability of the Relevant Documents or any other documents;
 
(b)                                          the financial condition of any Security Party;
 
(c)                                           the performance and observance by any Security Party of its obligations under the Relevant Documents or any other documents; or
 
(d)                                          the accuracy of any statements (whether written or oral) made in or in connection with any of the Relevant Documents or any other document,
 
and any representations or warranties implied by law are excluded.
 
23.4.2                       Each New Lender confirms to the Existing Lender and the other Finance Parties that it:
 
(a)                                          has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Security Party and each other member of the Group and its related entities in connection with its participation in this Agreement and has not relied exclusively on any
 
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information provided to it by the Existing Lender in connection with any of the Relevant Documents; and
 
(b)                                          will continue to make its own independent appraisal of the creditworthiness of each Security Party and each other member of the Group and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
 
23.4.3                       Nothing in any Finance Document obliges an Existing Lender to:
 
(a)                                          accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 23; or
 
(b)                                          support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Security Party of its obligations under the Relevant Documents or otherwise.
 
23.5                                  Procedure for transfer
 
23.5.1                       Subject to the conditions set out in Clause 23.2 ( Conditions of assignment or transfer ) a transfer is effected in accordance with Clause 23.5.3 when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender.  The Agent shall, subject to Clause 23.2.3(b), as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.
 
23.5.2                       The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.
 
23.5.3                       On the Transfer Date:
 
(a)                                          to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each Borrower and the Guarantor and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another shall be cancelled (being the “ Discharged Rights and Obligations ”);
 
(b)                                          each Borrower and the Guarantor and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Borrower and the Guarantor and the New Lender have assumed and/or acquired the same in place of that Borrower and the Guarantor and the Existing Lender;
 
(c)                                           the Agent, the Security Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the
 
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New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Security Agent, the Arranger and the Existing Lender shall each be released from further obligations to each other under this Agreement; and
 
(d)                                          the New Lender shall become a Party as a “Lender”.
 
23.6                                  Procedure for assignment
 
23.6.1                       Subject to the conditions set out in Clause 23.2 ( Conditions of assignment or transfer ) an assignment may be effected in accordance with Clause 23.6.3 when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender.  The Agent shall, subject to Clause 23.6.2, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.
 
23.6.2                       The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.
 
23.6.3                       On the Transfer Date:
 
(a)                                          the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents and expressed to be the subject of the assignment in the Assignment Agreement;
 
(b)                                          the Existing Lender will be released from the obligations (the “ Relevant Obligations ”) expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents); and
 
(c)                                           the New Lender shall become a Party as a “Lender” and will be bound by obligations equivalent to the Relevant Obligations.
 
23.6.4                       Lenders may utilise procedures other than those set out in this Clause 23.6 to assign their rights under the Finance Documents (but not, without the consent of the relevant Security Party or unless in accordance with Clause 23.5 ( Procedure for transfer ), to obtain a release by that Security Party from the obligations owed to that Security Party by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 23.2 ( Conditions of assignment or transfer ).
 
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23.7                                  Copy of Transfer Certificate or Assignment Agreement to Borrowers    The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrowers a copy of that Transfer Certificate or Assignment Agreement.
 
23.8                                  Security over Lenders’ rights    In addition to the other rights provided to Lenders under this Clause 23, each Lender may without consulting with or obtaining consent from any Security Party, at any time charge, assign or otherwise create Encumbrances in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
 
23.8.1                       any charge, assignment or other Encumbrance to secure obligations to a federal reserve or central bank; and
 
23.8.2                       in the case of any Lender which is a fund, any charge, assignment or other Encumbrance granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,
 
except that no such charge, assignment or Encumbrance shall:
 
(a)                                          release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Encumbrance for the Lender as a party to any of the Finance Documents; or
 
(b)                                          require any payments to be made by a Security Party other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.
 
24                                            Changes to the Security Parties
 
24.1                                  No assignment or transfer by Security Parties    No Security Party may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
 
24.2                                 Additional Borrowers
 
24.2.1                       Subject to compliance with the provisions of Clauses 19.7.3 and 19.7.4 ( “Know your customer” checks ), the Borrowers may request that any member of the Group becomes a Borrower.
 
24.2.2                       A member of the Group shall become a Borrower if:
 
(a)                                          all the Lenders approve the addition of that member of the Group;
 
(b)                                          each Borrower, the Guarantor and that member of the Group deliver to the Agent a duly completed and executed Accession Deed;
 
(c)                                           each Borrower and the Guarantor confirms that no Default is continuing or would occur as a result of that member of the Group becoming an Additional Borrower;
 
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(d)                                          that member of the Group is or, upon drawdown of the relevant Drawing, will be the owner of an Additional Vessel and the Borrowers’ request for that member of the Group to become a Borrower is accompanied with an Increase Request; and
 
(e)                                           the Agent has received all of the documents and other evidence listed in Part III of ‎Schedule 2 ( Conditions precedent in respect of an Increase Request ) and, if applicable, Part IV of Schedule 2 ( Conditions subsequent in respect of an Increase Request ) in relation to that Additional Borrower, each in form and substance satisfactory to the Agent.
 
24.2.3                       The Agent shall notify the Borrowers and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part I and Part III of ‎Schedule 2 ( Conditions Precede nt) and, if applicable, Part II and Part IV of Schedule 2 ( Conditions Subsequent ) in relation to the relevant Additional Borrowers.
 
24.2.4                       Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause 24.2.3, the Lenders authorise (but do not require) the Agent to give that notification.  The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
 
24.3                                  Release of Security following mandatory prepayment on sale or Total Loss
 
If so requested by the Borrowers the Security Agent may, subject to no Event of Default having occurred which is continuing, at the cost and request of the Security Parties, release the relevant Borrower from the relevant Finance Documents following a mandatory prepayment made pursuant to Clause 7.5 ( Mandatory prepayment on sale or Total Loss ) or Clause 7.6.2 ( Mandatory prepayment on Change of Control ) following a sale or Total Loss of a Vessel or a Change of Control of a Borrower.
 
24.4                                  Repetition of Representations
 
Delivery of an Accession Deed constitutes confirmation by the relevant member of the Group that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
 
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Section 10                                       The Finance Parties
 
25                                            Role of the Agent, the Security Agent and the Arranger
 
25.1                                  Appointment of the Agent
 
25.1.1                       Each of the Arranger and the Lenders appoints the Agent to act as its agent under and in connection with the Finance Documents and each of the Arranger, the Lenders and the Agent appoints the Security Agent to act as its security agent for the purpose of the Security Documents.
 
25.1.2                       Each of the Arranger and the Lenders authorises the Agent and each of the Arranger, the Lenders and the Agent authorises the Security Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent or the Security Agent (as the case may be) under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.
 
25.1.3                       Except in Clause 25.14 ( Replacement of the Agent ) or where the context otherwise requires, references in this Clause 25 to the “ Agent ” shall mean the Agent and the Security Agent individually and collectively.
 
25.2                                  Instructions
 
25.2.1                       The Agent shall:
 
(a)                                          unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by:
 
(i)                                               all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
 
(ii)                                            in all other cases, the Majority Lenders; and
 
(b)                                          not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with Clause 25.2.1(a).
 
25.2.2                       The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.
 
25.2.3                       Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
 
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25.2.4                       The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.
 
25.2.5                       In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.
 
25.2.6                       The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.  This Clause 25.2.6 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Finance Documents or the enforcement of the Finance Documents.
 
25.3                                  Duties of the Agent
 
25.3.1                       The Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.
 
25.3.2                       Subject to Clause 25.3.3, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.
 
25.3.3                       Without prejudice to Clause 23.7 ( Copy of Transfer Certificate or Assignment Agreement to Borrowers ), Clause 25.3.1 shall not apply to any Transfer Certificate or any Assignment Agreement.
 
25.3.4                       Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
 
25.3.5                       If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.
 
25.3.6                       If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Arranger or the Security Agent) under this Agreement it shall promptly notify the other Finance Parties.
 
25.3.7                       The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).
 
25.4                                  Role of the Arranger    Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.
 
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25.5                                  No fiduciary duties
 
25.5.1                       Subject to Clause 25.12 ( Trust ) which relates to the Security Agent only, nothing in any Finance Document constitutes the Agent or the Arranger as a trustee or fiduciary of any other person.
 
25.5.2                       Neither the Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.
 
25.6                                  Business with Security Parties and the Group    The Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Borrower, any other Security Party or its Affiliate and any other member of the Group.
 
25.7                                  Rights and discretions of the Agent
 
25.7.1                       The Agent may:
 
(a)                                          rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
 
(b)                                          assume that:
 
(i)                                               any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and
 
(ii)                                            unless it has received notice of revocation, that those instructions have not been revoked; and
 
(iii)                                         rely on a certificate from any person:
 
(A)                                         as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
 
(B)                                         to the effect that such person approves of any particular dealing, transaction, step, action or thing,
 
as sufficient evidence that that is the case and, in the case of (A), may assume the truth and accuracy of that certificate.
 
25.7.2                       The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders or security agent for the Finance Parties (as the case may be)) that:
 
(a)                                          no Default has occurred (unless it has actual knowledge of a Default arising under Clause 22.1 ( Events of Default ));
 
(b)                                          any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and
 
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(c)                                           any notice or request made by the Borrowers (other `than a Drawdown Request) is made on behalf of and with the consent and knowledge of all the Security Parties.
 
25.7.3                       The Agent may engage and pay for the advice or services of any lawyers, accountants, surveyors or other experts.
 
25.7.4                       Without prejudice to the generality of Clause 25.7.3 or Clause 25.7.5, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable.
 
25.7.5                       The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.
 
25.7.6                       The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not:
 
(a)                                          be liable for any error of judgment made by any such person; or
 
(b)                                          be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person,
 
unless such error or such loss was directly caused by the Agent’s gross negligence or wilful misconduct.
 
25.7.7                       Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.
 
25.7.8                       Without prejudice to the generality of Clause 25.7.7, the Agent:
 
(a)                                          may disclose; and
 
(b)                                          on the written request of the Borrowers or the Majority Lenders shall, as soon as reasonably practicable, disclose,
 
the identity of a Defaulting Lender to the Borrowers and to the other Finance Parties.
 
25.7.9                       Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
 
25.7.10                The Agent may not disclose to any Finance Party any details of the rate notified to the Agent by any Lender or the identity of any such Lender for the purpose of Clause 10.2.2 ( Market Disruption ).
 
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25.7.11                Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
 
25.8                                  Responsibility for documentation    Neither the Agent nor the Arranger is responsible or liable for:
 
25.8.1                       the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, a Security Party or any other person given in or in connection with any Relevant Document; or
 
25.8.2                       the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Relevant Document; or
 
25.8.3                       any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
 
25.9                                  No duty to monitor    The Agent shall not be bound to enquire:
 
25.9.1                       whether or not any Default has occurred;
 
25.9.2                       as to the performance, default or any breach by any Party of its obligations under any Finance Document; or
 
25.9.3                       whether any other event specified in any Finance Document has occurred.
 
25.10                           Exclusion of liability
 
25.10.1                Without limiting Clause 25.10.2 (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent) the Agent shall not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:
 
(a)                                          any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents, unless directly caused by its gross negligence or wilful misconduct;
 
(b)                                          exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, any Encumbrance created or expressed to be created or evidenced by the Security Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance
 
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Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents;
 
(c)                                           any shortfall which arises on the enforcement or realisation of the Trust Property; or
 
(d)                                          without prejudice to the generality of Clauses 25.10.1(a), 25.10.1(b) and 25.10.1(c), any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
 
(i)                                               any act, event or circumstance not reasonably within its control; or
 
(ii)                                            the general risks of investment in, or the holding of assets in, any jurisdiction,
 
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.
 
25.10.2                No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Relevant Document and any officer, employee or agent of the Agent may rely on this Clause.
 
25.10.3                The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.
 
25.10.4                Nothing in this Agreement shall oblige the Agent or the Arranger to carry out:
 
(a)                                          any “know your customer” or other checks in relation to any person;
 
(b)                                          any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,
 
on behalf of any Lender and each Lender confirms to the Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arranger.
 
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25.10.5                Without prejudice to any provision of any Finance Document excluding or limiting the Agent’s liability, any liability of the Agent arising under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss.  In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages.
 
25.11                           Lenders’ indemnity to the Agent
 
25.11.1                Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent and every Receiver and Delegate, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them (otherwise than by reason of the relevant Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 28.12 ( Disruption to payment systems etc. ) notwithstanding the Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent, Receiver or Delegate under, or exercising any authority conferred under, the Finance Documents (unless the relevant Agent, Receiver or Delegate has been reimbursed by a Security Party pursuant to a Finance Document).
 
25.11.2                A Finance Party shall indemnify the Facility Agent, within 3 Business Days of demand, against any cost, loss of liability incurred by the Facility Agent with respect to any Tax imposed by reason of FATCA attributable to such Finance Party in relation to the Finance Documents.
 
25.11.3                Subject to Clause 25.11.4, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to Clause 25.11.1
 
25.11.4                Clause 25.11.2 shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent to a Security Party.
 
25.12                           Trust    The Security Agent agrees and declares, and each of the other Finance Parties acknowledges, that, subject to the terms and conditions of this Clause 25.12, the Security Agent holds the Trust Property on trust for the Finance Parties absolutely.  Each of the other Finance Parties agrees that the obligations, rights and benefits vested in the Security Agent shall be performed and exercised in accordance with this Clause 25.12.  The Security Agent shall have the benefit of all of the
 
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provisions of this Agreement benefiting it in its capacity as security agent for the Finance Parties, and all the powers and discretions conferred on trustees by the Trustee Act 1925 (to the extent not inconsistent with this Agreement).  In addition:
 
25.12.1                the Security Agent and any Delegate may indemnify itself or himself out of the Trust Property against all liabilities, costs, fees, damages, charges, losses and expenses sustained or incurred by it or him in relation to the taking or holding of any of the Trust Property or in connection with the exercise or purported exercise of the rights, trusts, powers and discretions vested in the Security Agent or any Delegate by or pursuant to the Security Documents or in respect of anything else done or omitted to be done in any way relating to the Security Documents;
 
25.12.2                the other Finance Parties acknowledge that the Security Agent shall be under no obligation to insure any property nor to require any other person to insure any property and shall not be responsible for any loss which may be suffered by any person as a result of the lack or insufficiency of any insurance;
 
25.12.3                the Finance Parties agree that the perpetuity period applicable to the trusts declared by this Agreement shall be the period of 125 years from the date of this Agreement;
 
25.12.4                the Security Agent shall not be liable for any failure, omission, or defect in perfecting the security constituted or created by any Finance Document including, without limitation, any failure to register the same in accordance with the provisions of any of the documents of title of any Security Party to any of the assets thereby charged or effect or procure registration of or otherwise protect the security created by any Security Document under any registration laws in any jurisdiction and may accept without enquiry such title as any Security Party may have to any asset;
 
25.12.5                the Security Agent shall not be under any obligation to hold any title deed, Finance Document or any other documents in connection with the Finance Documents or any other documents in connection with the property charged by any Finance Document or any other such security in its own possession or to take any steps to protect or preserve the same, and may permit any Security Party to retain all such title deeds, Finance Documents and other documents in its possession; and
 
25.12.6                save as otherwise provided in the Finance Documents, all moneys which under the trusts therein contained are received by the Security Agent may be invested in the name of or under the control of the Security Agent in any investment for the time being authorised by English law for the investment by trustees of trust money or in any other investments which may be selected by the Security Agent, and the same may be placed on deposit in the name of or under the control of the Security Agent at such bank or institution (including the Security Agent) and upon such terms as the Security Agent may think fit.
 
The provisions of Part I of the Trustee Act 2000 shall not apply to the Security Agent or the Trust Property.
 
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25.13                           Resignation of the Agent
 
25.13.1                The Agent may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Finance Parties and the Borrowers.
 
25.13.2                Alternatively the Agent may resign by giving 30 days’ notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders (after consultation with the Borrowers) may appoint a successor Agent.
 
25.13.3                If the Majority Lenders have not appointed a successor Agent in accordance with Clause 25.13.2 within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Borrowers) may appoint a successor Agent.
 
25.13.4                If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under Clause 25.13.3, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this Clause 25 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Agent’s normal fee rates and those amendments will bind the Parties.
 
25.13.5                The retiring Agent shall, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.  The Borrowers shall, within three Business Days of demand, reimburse the retiring Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.
 
25.13.6                The Agent’s resignation notice shall only take effect upon the appointment of a successor and (in the case of the Security Agent) the transfer of all the Trust Property to that successor.
 
25.13.7                Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 25.13.5) but shall remain entitled to the benefit of Clause 14.3 ( Indemnity to the Agent ) and this Clause 25 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).  Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
 
25.13.8                The Agent shall resign in accordance with Clause 25.13.2 (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to Clause 25.13.3) if on or after the date which is three months
 
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before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:
 
(a)                                          the Agent fails to respond to a request under Clause 12.7 ( FATCA information ) and a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;
 
(b)                                          the information supplied by the Agent pursuant to Clause 12.7 ( FATCA information ) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or
 
(c)                                           the Agent notifies the Borrowers and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;
 
and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and that Lender, by notice to the Agent, requires it to resign.
 
25.14                           Replacement of the Agent
 
25.14.1                After consultation with the Borrowers, the Majority Lenders may, by giving 30 days’ notice to the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority lenders) replace the Agent by appointing a successor Agent.
 
25.14.2                The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its function as Agent under the Finance Documents.
 
25.14.3                The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent.  As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 25.14.2 but shall remain entitled to the benefit of Clause 14.3 ( Indemnity to the Agent ) and this Clause 25 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).
 
25.14.4                Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
 
25.15                           Confidentiality
 
25.15.1                In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
 
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25.15.2                If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.
 
25.16                           Relationship with the Lenders
 
25.16.1                the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent’s principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:
 
(a)                                          entitled to or liable for any payment due under any Finance Document on that day; and
 
(b)                                          entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
 
unless it has received not less than five Business Days’ prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
 
25.16.2                Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or dispatched to that Lender under the Finance Documents.  Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 30.6 ( Electronic communication )) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 30.2 ( Addresses ) and Clause 30.6.1(b) ( Electronic communication ) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
 
25.17                           Credit appraisal by the Lenders    Without affecting the responsibility of any Security Party for information supplied by it or on its behalf in connection with any Relevant Document, each Lender confirms to the Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Relevant Document including but not limited to:
 
25.17.1                the financial condition, status and nature of each Security Party;
 
25.17.2                the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Relevant Document;
 
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25.17.3                whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Relevant Document, the transactions contemplated by the Relevant Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of under or in connection with any Relevant Document; and
 
25.17.4                the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any Encumbrance created or expressed to be created or evidenced by the Security Documents or the existence of any Encumbrance affecting the Charged Property.
 
25.18                           Reference Banks    If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Borrowers) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.
 
25.19                           Deduction from amounts payable by the Agent    If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed.  For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
 
26                                            Conduct of Business by the Finance Parties
 
No provision of this Agreement will:
 
26.1                                  interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
 
26.2                                  oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
 
26.3                                  oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
 
27                                            Sharing among the Finance Parties
 
27.1                                  Payments to Finance Parties    If a Finance Party (a “ Recovering Finance Party ”) receives or recovers any amount from a Security Party other than in accordance with Clause 28 ( Payment Mechanics ) (a “ Recovered Amount ”) and applies that amount to a payment due under the Finance Documents then:
 
27.1.1                       the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;
 
27.1.2                       the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 28 ( Payment Mechanics ), without taking account of
 
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any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and
 
27.1.3                       the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the “ Sharing Payment ”) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 28.6 ( Partial payments ).
 
27.2                                  Redistribution of payments    The Agent shall treat the Sharing Payment as if it had been paid by the relevant Security Party and distribute it between the Finance Parties (other than the Recovering Finance Party) (the “ Sharing Finance Parties ”) in accordance with Clause 28.6 ( Partial payments ) towards the obligations of that Security Party to the Sharing Finance Parties.
 
27.3                                  Recovering Finance Party’s rights    On a distribution by the Agent under Clause 27.2 ( Redistribution of payments ) of a payment received by a Recovering Finance Party from a Security Party, as between the relevant Security Party and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Security Party.
 
27.4                                  Reversal of redistribution    If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
 
27.4.1                       each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the “ Redistributed Amount ”); and
 
27.4.2                       as between the relevant Security Party and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Security Party.
 
27.5                                  Exceptions
 
27.5.1                       This Clause 27 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Security Party.
 
27.5.2                       A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:
 
(a)                                          it notified that other Finance Party of the legal or arbitration proceedings; and
 
(b)                                          that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
 
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Section 11                                       Administration
 
28                                            Payment Mechanics
 
28.1                                  Payments to the Agent    On each date on which a Security Party or a Lender is required to make a payment under a Finance Document, that Security Party or that Lender shall make the same available to the Agent for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
 
Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Agent specifies.
 
28.2                                  Distributions by the Agent    Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 28.3 ( Distributions to a Security Party ) and Clause 28.4 ( Clawback and pre-funding ) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days’ notice with a bank specified by that Party in the principal financial centre of the country of that currency.
 
28.3                                  Distributions to a Security Party    The Agent may (with the consent of a Security Party or in accordance with Clause 29 ( Set-Off )) apply any amount received by it for that Security Party in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Security Party under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
 
28.4                                  Clawback and pre-funding
 
28.4.1                       Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
 
28.4.2                       Unless Clause 28.4.3 applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.
 
28.4.3                       If the Agent is willing to make available amounts for the account of a Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to a Borrower:
 
(a)                                          the Borrower to whom that sum was made available shall on demand refund it to the Agent; and
 
(b)                                          the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower to whom that sum was made
 
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available, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.
 
28.5                                  Impaired Agent
 
28.5.1                       If, at any time, the Agent becomes an Impaired Agent, a Security Party or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 28.1 ( Payments to the Agent ) may instead either:
 
(a)                                          pay that amount direct to the required recipient(s); or
 
(b)                                          if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank in relation to which no Insolvency Event has occurred and is continuing, in the name of the Security Party or the Lender making the payment (the “ Paying Party ”) and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the “ Recipient Party ” or “ Recipient Parties ”).
 
In each case such payments must be made on the due date for payment under the Finance Documents.
 
28.5.2                       All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.
 
28.5.3                       A Party which has made a payment in accordance with this Clause 28.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.
 
28.5.4                       Promptly upon the appointment of a successor Agent in accordance with Clause 25.14 ( Replacement of the Agent ), each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to Clause 28.5.5) give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with Clause 28.2 ( Distributions by the Agent ).
 
28.5.5                       A Paying Party shall, promptly upon request by a Recipient Party and to the extent:
 
(a)                                          that it has not given an instruction pursuant to Clause 28.5.4; and
 
(b)                                          that it has been provided with the necessary information by that Recipient Party,
 
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give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.
 
28.6                                  Partial payments
 
28.6.1                       If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by a Security Party under the Finance Documents, the Agent shall apply that payment towards the obligations of that Security Party under the Finance Documents in the following order:
 
(a)                                          first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent or the Security Agent under the Finance Documents;
 
(b)                                          secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;
 
(c)                                           thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and
 
(d)                                          fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.
 
28.6.2                       The Agent shall, if so directed by the Majority Lenders, vary the order set out in Clauses 28.6.1(b) to 28.6.1(d).
 
28.6.3                       Clauses 28.6.1 and 28.6.2 will override any appropriation made by a Security Party.
 
28.7                                  No set-off by Security Parties    All payments to be made by a Security Party under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
 
28.8                                  Business Days    Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
 
During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
 
28.9                                  Currency of account
 
28.9.1                       Subject to Clauses 28.9.2 to 28.9.5, dollars is the currency of account and payment for any sum due from a Security Party under any Finance Document.
 
28.9.2                       A repayment or payment of all or part of a Drawing or an Unpaid Sum shall be made in the currency in which that Drawing or Unpaid Sum is denominated on its due date.
 
28.9.3                       Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.
 
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28.9.4                       Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
 
28.9.5                       Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
 
28.10                           Control account    The Agent shall open and maintain on its books a control account in the names of the Borrowers showing the advance of each Drawing and the computation and payment of interest and all other sums due under this Agreement.  The Borrowers’ obligations to repay each Drawing and to pay interest and all other sums due under this Agreement shall be evidenced by the entries from time to time made in the control account opened and maintained under this Clause 28.10 and those entries will, in the absence of manifest error, be conclusive and binding.
 
28.11                           Change of currency
 
28.11.1                Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:
 
(a)                                          any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrowers); and
 
(b)                                          any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).
 
28.11.2                If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.
 
28.12                           Disruption to payment systems etc.    If either the Agent determines in its discretion that a Disruption Event has occurred or the Agent is notified by the Borrowers that a Disruption Event has occurred:
 
28.12.1                the Agent may, and shall if requested to do so by the Borrowers, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the operation or administration of the Loan as the Agent may deem necessary in the circumstances;
 
28.12.2                the Agent shall not be obliged to consult with the Borrowers in relation to any changes mentioned in Clause 28.12.1 if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to any such changes;
 
28.12.3                the Agent may consult with the Finance Parties in relation to any changes mentioned in Clause 28.12.1 but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
 
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28.12.4                any such changes agreed upon by the Agent and the Borrowers shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 34 ( Amendments and Waivers );
 
28.12.5                the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation, for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 28.12; and
 
28.12.6                the Agent shall notify the Finance Parties of all changes agreed pursuant to Clause 28.12.4.
 
29                                            Set-Off
 
29.1                                  Set-off    A Finance Party may set off any matured obligation due from a Security Party under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Security Party, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
 
30                                            Notices
 
30.1                                  Communications in writing    Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
 
30.2                                  Addresses    The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
 
30.2.1                       in the case of each Borrower, that identified with its name below;
 
30.2.2                       in the case of each Lender, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and
 
30.2.3                       in the case of the Agent or the Security Agent, that identified with its name below,
 
or any substitute address, fax number, or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days’ notice.
 
30.3                                  Delivery    Any communication or document made or delivered by one Party to another under or in connection with the Finance Documents will only be effective:
 
30.3.1                       if by way of fax, when received in legible form; or
 
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30.3.2                       if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;
 
and, if a particular department or officer is specified as part of its address details provided under Clause 30.2 ( Addresses ), if addressed to that department or officer.
 
Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent’s or the Security Agent’s signature below (or any substitute department or officer as the Agent or the Security Agent shall specify for this purpose).
 
All notices from or to a Security Party shall be sent through the Agent.
 
Any communication or document which becomes effective, in accordance with this Clause 30.3, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
 
30.4                                  Notification of address and fax number    Promptly upon changing its address or fax number, the Agent shall notify the other Parties.
 
30.5                                  Communication when Agent is Impaired Agent    If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent, communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly.  This provision shall not operate after a replacement Agent has been appointed.
 
30.6                                  Electronic communication
 
30.6.1                       Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication and if those two Parties:
 
(a)                                          notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
 
(b)                                          notify each other of any change to their address or any other such information supplied by them by not less than five Business Days’ notice.
 
30.6.2                       Any electronic communication made between those two Parties will be effective only when actually received in readable form and in the case of any electronic communication made by a Party to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose.
 
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30.6.3                       Any electronic communication which becomes effective, in accordance with Clause 30.6.2, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
 
30.7                                  English language    Any notice given under or in connection with any Finance Document must be in English.  All other documents provided under or in connection with any Finance Document must be:
 
30.7.1                       in English; or
 
30.7.2                       if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
 
31                                            Calculations and Certificates
 
31.1                                  Accounts    In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Agent are prima facie evidence of the matters to which they relate.
 
31.2                                  Certificates and determinations    Any certification or determination by the Agent of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
 
31.3                                  Day count convention    Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.
 
32                                            Partial Invalidity
 
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
 
33                                            Remedies and Waivers
 
No failure to exercise, nor any delay in exercising, on the part of any Finance Party or Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document.  No election to affirm any Finance Document on the part of any Finance Party or Secured Party shall be effective unless it is in writing.  No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
 
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34                                            Amendments and Waivers
 
34.1                                  Required consents
 
34.1.1                       Subject to Clause 34.2 ( Exceptions ) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Borrowers and any such amendment or waiver will be binding on all Parties.
 
34.1.2                       The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 34.
 
34.1.3                       Without prejudice to the generality of Clauses 25.7.3, 25.7.4 and 25.7.5 ( Rights and discretions of the Agent ), the Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.
 
34.2                                  Exceptions
 
34.2.1                       An amendment, waiver or (in the case of a Security Document) a consent of, or in relation to, any term of any Finance Document that has the effect of changing or which relates to:
 
(a)                                          the definition of “ Majority Lenders ” in Clause 1.1 ( Definitions );
 
(b)                                          an extension to the date of payment of any amount under the Finance Documents;
 
(c)                                           a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
 
(d)                                          a change in currency of payment of any amount under the Finance Documents;
 
(e)                                           an increase in any Commitment, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably;
 
(f)                                            a change to a Borrower or a change to the Guarantor other than in accordance with Clause 24 ( Changes to the Security Parties );
 
(g)                                           any provision which expressly requires the consent of all the Lenders;
 
(h)                                          Clause 2.2 ( Finance Parties’ rights and obligations ), Clause 23 ( Changes to the Lenders ), this Clause 34, Clause 39 ( Governing Law ) or Clause 40.1 ( Jurisdiction of English courts );
 
(i)                                              (other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:
 
(i)                                               the Guarantee;
 
(ii)                                            the Charged Property; or
 
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(iii)                                         the manner in which the proceeds of enforcement of the Security Documents are distributed; or
 
(j)                                             the release of the Guarantee or of any Encumbrance created or expressed to be created or evidenced by the Security Documents unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of any Encumbrance created or expressed to be created or evidenced by the Security Documents where such sale or disposal is expressly permitted under this Agreement or any other Finance Document;
 
shall not be made, or given, without the prior consent of all the Lenders.
 
34.2.2                       An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arranger (each in their capacity as such) may not be effected without the consent of the Agent, the Security Agent or, as the case may be, the Arranger.
 
34.3                                  Excluded Commitments
 
If:
 
34.3.1                       any Defaulting Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any term of any Finance Document or any other vote of Lenders under the terms of this Agreement within fifteen (15) Business Days of that request being made; or
 
34.3.2                       any Lender which is not a Defaulting Lender fails to respond to such a request (other than an amendment, waiver or consent referred to in Clauses 34.2.1(b), 34.2.1(c) and 34.2.1(e) ( Exceptions )) or other or such a vote within 15 Business Days of that request being made,
 
(unless, in either case, the Borrowers and the Agent agree to a longer time period in relation to any request):
 
(a)                                          its Commitment(s) shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage (including, for the avoidance of doubt, unanimity) of Total Commitments has been obtained to approve that request; and
 
(b)                                          its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
 
34.4                                  Replacement of Lender
 
34.4.1                       If:
 
(a)                                          any Lender becomes a Non-Consenting Lender (as defined in Clause 34.4.4); or
 
(b)                                          a Borrower or any other Security Party becomes obliged to repay any amount in accordance with Clause 7.1 ( Illegality ) or to pay additional
 
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amounts pursuant to Clause 12.2 ( Tax gross-up ), Clause 12.3 ( Tax Indemnity ) or Clause 13.1 ( Increased costs ) to any Lender,
 
then the Borrowers may, on ten Business Days’ prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to Clause 23 ( Changes to the Lenders ) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a “ Replacement Lender ”) selected by the Borrowers, which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 23 ( Changes to the Lenders ) for a purchase price in cash payable at the time of transfer in an amount equal to the outstanding principal amount of such Lender’s participation in the outstanding Loan and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.
 
34.4.2                       The replacement of a Lender pursuant to this Clause 34.4 shall be subject to the following conditions:
 
(a)                                          the Borrowers shall have no right to replace the Agent or Security Agent;
 
(b)                                          neither the Agent nor the Lender shall have any obligation to the Borrowers to find a Replacement Lender;
 
(c)                                           in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than 7 days after the date on which that Lender is deemed a Non-Consenting Lender;
 
(d)                                          in no event shall the Lender replaced under this Clause 34.4 be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents; and
 
(e)                                           the Lender shall only be obliged to transfer its rights and obligations pursuant to Clause 34.4.1 once it is satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to that transfer.
 
34.4.3                       A Lender shall perform the checks described in Clause 34.4.2(e) as soon as reasonably practicable following delivery of a notice referred to in Clause 34.4.1 and shall notify the Agent and the Borrowers when it is satisfied that it has complied with those checks.
 
34.4.4                       In the event that:
 
(a)                                          the Borrowers or the Agent (at the request of the Borrowers) have requested the Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any provisions of the Finance Documents;
 
(b)                                          the consent, waiver or amendment in question requires the approval of all the Lenders; and
 
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(c)                                           Lenders whose Commitments aggregate more than eighty (80) per cent of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than eighty (80) per cent of the Total Commitments prior to that reduction) have consented or agreed to such waiver or amendment,
 
then any Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a “ Non-Consenting Lender ”.
 
34.5                                  Disenfranchisement of Defaulting Lenders
 
34.5.1                       For so long as a Defaulting Lender has any Commitment, in ascertaining:
 
(a)                                          the Majority Lenders; or
 
(b)                                          whether:
 
(i)                                               any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments; or
 
(ii)                                            the agreement of any specified group of Lenders,
 
has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents, that Defaulting Lender’s Commitment will be reduced by the amount of its participation in the Loan it has failed to make available and, to the extent that that reduction results in that Defaulting Lender’s Commitment being zero, that Defaulting Lender shall be deemed not to be a Lender for the purposes of (i) and (ii).
 
34.5.2                       For the purposes of this Clause 34.5, the Agent may assume that the following Lenders are Defaulting Lenders:
 
(a)                                          any Lender which has notified the Agent that it has become a Defaulting Lender;
 
(b)                                          any Lender in relation to which it is aware that any of the events or circumstances referred to in (a), (b) or (c) of the definition of “Defaulting Lender” has occurred,
 
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
 
34.6                                  Replacement of a Defaulting Lender
 
34.6.1                       The Borrowers may, at any time a Lender has become and continues to be a Defaulting Lender, by giving ten Business Days’ prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to Clause 23 ( Changes to the Lenders ) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a “ Replacement Lender ”) selected
 
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by the Borrowers which confirms its willingness to assume and does assume all the obligations, or all the relevant obligations, of the transferring Lender in accordance with Clause 23 ( Changes to the Lenders) for a purchase price in cash payable at the time of transfer which is either:
 
(a)                                          in an amount equal to the outstanding principal amount of such Lender’s participation in the outstanding Loan and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents; or
 
(b)                                          in an amount agreed between that Defaulting Lender, the Replacement Lender and the Borrowers and which does not exceed the amount described in (a).
 
34.6.2                       Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause 34.6 shall be subject to the following conditions:
 
(a)                                          the Borrowers shall have no right to replace the Agent or Security Agent;
 
(b)                                          neither the Agent nor the Defaulting Lender shall have any obligation to the Borrowers to find a Replacement Lender;
 
(c)                                           the transfer must take place no later than seven days after the notice referred to in Clause 34.6.1;
 
(d)                                          in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and
 
(e)                                           the Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to 34.6.1 once it is satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to that transfer to the Replacement Lender.
 
34.6.3                       The Defaulting Lender shall perform the checks described in Clause 34.6.2(e) as soon as reasonably practicable following delivery of a notice referred to in Clause 34.6.1 and shall notify the Agent and the Borrowers when it is satisfied that it has complied with those checks.
 
35                                           Confidentiality
 
35.1                                  Confidential Information    Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 35.2 ( Disclosure of Confidential Information ) and Clause 35.3 ( Disclosure to numbering service providers ), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
 
35.2                                  Disclosure of Confidential Information    Any Finance Party may disclose:
 
35.2.1                       to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and
 
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Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 35.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
 
35.2.2                       to any person:
 
(a)                                          to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent or Security Agent and, in each case, to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
 
(b)                                          with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Security Parties and to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
 
(c)                                           appointed by any Finance Party or by a person to whom Clause 35.2.2(a) or 35.2.2(b) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under Clause 25.16.2 ( Relationship with the Lenders ));
 
(d)                                          who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 35.2.2(a) or 35.2.2(b);
 
(e)                                           to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
 
(f)                                            to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
 
(g)                                           to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 23.8 ( Security over Lenders’ rights );
 
(h)                                          who is a Party; or
 
(i)                                              with the consent of the Borrowers;
 
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in each case, such Confidential Information as that Finance Party shall consider appropriate if:
 
(i)                                               in relation to Clauses 35.2.2(a), 35.2.2(b) and 35.2.2(c), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
 
(ii)                                            in relation to Clause 35.2.2(d), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
 
(iii)                                         in relation to Clauses 35.2.2(e), 35.2.2(f) and 35.2.2(g), the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;
 
35.2.3                       to any person appointed by that Finance Party or by a person to whom Clause 35.2.2(a) or 35.2.2(b) applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause 35.2.3 if the service provider to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking; and
 
35.2.4                       to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Security Parties if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.  Any Lender may also disclose the size and term of the Loan and the name of each of the Security Parties to any investor or a potential investor in a securitisation (or similar transaction of broadly equivalent economic effect) of that Lender’s rights or obligations under the Finance Documents.
 
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35.3                                  Disclosure to numbering service providers
 
35.3.1                       Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Loan and/or one or more Security Parties the following information:
 
(a)                                          names of Security Parties;
 
(b)                                          country of domicile of Security Parties;
 
(c)                                           place of incorporation of Security Parties;
 
(d)                                          date of this Agreement;
 
(e)                                           Clause 39 ( Governing law );
 
(f)                                            the names of the Agent and the Arranger;
 
(g)                                           date of each amendment and restatement of this Agreement;
 
(h)                                          amount of Total Commitments;
 
(i)                                              currencies of the Loan;
 
(j)                                             type of Loan;
 
(k)                                          ranking of the Loan;
 
(l)                                              Termination Date;
 
(m)                                      changes to any of the information previously supplied pursuant to (a) to (l); and
 
(n)                                          such other information agreed between such Finance Party and that Security Party,
 
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
 
35.3.2                       The Parties acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or one or more Security Parties by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
 
35.3.3                       The Agent shall notify the Borrowers and the other Finance Parties of:
 
(a)                                          the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Loan and/or one or more Security Parties; and
 
(b)                                          the number or, as the case may be, numbers assigned to this Agreement, the Loan and/or one or more Security Parties by such numbering service provider.
 
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35.4                                  Entire agreement    This Clause 35 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
 
35.5                                  Inside information    Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
 
35.6                                  Notification of disclosure    Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrowers:
 
35.6.1                       of the circumstances of any disclosure of Confidential Information made pursuant to Clause 35.2.2(e) ( Disclosure of Confidential Information ) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of its supervisory or regulatory function; and
 
35.6.2                       upon becoming aware that Confidential Information has been disclosed in breach of this Clause 35.
 
35.7                                  Continuing obligations    The obligations in this Clause 35 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 months from the earlier of:
 
35.7.1                       the date on which all amounts payable by the Security Parties under or in connection with the Finance Documents have been paid in full and the Loan has been cancelled or otherwise ceases to be available; and
 
35.7.2                       the date on which such Finance Party otherwise ceases to be a Finance Party.
 
36                                            Disclosure of Lender Details by Agent
 
36.1                                  Supply of Lender details to Borrowers    The Agent shall provide to the Borrowers within seven Business Days of a request by the Borrowers (but no more frequently than once per calendar month) a list (which may be in electronic form) setting out the names of the Lenders as at that Business Day, their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Agent to that Lender under the Finance Documents.
 
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36.2                                  Supply of Lender details at Borrowers’ direction
 
36.2.1                       The Agent shall, at the request of the Borrowers, disclose the identity of the Lenders and the details of the Lenders’ Commitments to any:
 
(a)                                          other Party or any other person if that disclosure is made to facilitate, in each case, a refinancing of the Financial Indebtedness arising under the Finance Documents or a material waiver or amendment of any term of any Finance Document; and
 
(b)                                          Security Party.
 
36.2.2                       Subject to Clause 36.2.3, the Borrowers shall procure that the recipient of information disclosed pursuant to Clause 36.2.1 shall keep such information confidential and shall not disclose it to anyone and shall ensure that all such information is protected with security measures and a degree of care that would apply to the recipient’s own confidential information.
 
36.2.3                       The recipient may disclose such information to any of its officers, directors, employees, professional advisers, auditors and partners as it shall consider appropriate if any such person is informed in writing of its confidential nature, except that there shall be no such requirement to so inform if that person is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by duties of confidentiality in relation to the information.
 
36.3                                  Supply of Lender details to other Lenders
 
36.3.1                       If a Lender (a “ Disclosing Lender ”) indicates to the Agent that the Agent may do so, the Agent shall disclose that Lender’s name and Commitment to any other Lender that is, or becomes, a Disclosing Lender.
 
36.3.2                       The Agent shall, if so directed by the Requisite Lenders, request each Lender to indicate to it whether it is a Disclosing Lender.
 
36.4                                  Lender enquiry    If any Lender believes that any entity is, or may be, a Lender and:
 
36.4.1                       that entity ceases to have an Investment Grade Rating; or
 
36.4.2                       an Insolvency Event occurs in relation to that entity,
 
the Agent shall, at the request of that Lender, indicate to that Lender the extent to which that entity has a Commitment.
 
36.5                                  Lender details definitions    In this Clause 36:
 
“ Investment Grade Rating ” means, in relation to an entity, a rating for its long-term unsecured and non-credit-enhanced debt obligations of BBB- or higher by Standard & Poor’s Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moody’s Investors Service Limited or a comparable rating from an internationally recognised credit rating agency.
 
“ Requisite Lenders ” means a Lender or Lenders whose Commitments aggregate 15 per cent (or more) of the Total Commitments (or if the Total Commitments have
 
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been reduced to zero, aggregated 15 per cent (or more) of the Total Commitments immediately prior to that reduction).
 
37                                            Counterparts
 
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
 
38                                            Joint and Several Liability
 
38.1                                  Nature of liability   The representations, warranties, covenants, obligations and undertakings of the Borrowers contained in this Agreement shall be joint and several so that each Borrower shall be jointly and severally liable with all the Borrowers for all of the same and such liability shall not in any way be discharged, impaired or otherwise affected by:
 
38.1.1                       any forbearance (whether as to payment or otherwise) or any time or other indulgence granted to any other Borrower or any other Security Party under or in connection with any Finance Document;
 
38.1.2                       any amendment, variation, novation or replacement of any other Finance Document;
 
38.1.3                       any failure of any Finance Document to be legal valid binding and enforceable in relation to any other Borrower or any other Security Party for any reason;
 
38.1.4                       the winding-up or dissolution of any other Borrower or any other Security Party;
 
38.1.5                       the release (whether in whole or in part) of, or the entering into of any compromise or composition with, any other Borrower or any other Security Party; or
 
38.1.6                       any other act, omission, thing or circumstance which would or might, but for this provision, operate to discharge, impair or otherwise affect such liability.
 
38.2                                  No rights as surety   Until the Indebtedness has been unconditionally and irrevocably paid and discharged in full, each Borrower agrees that it shall not, by virtue of any payment made under this Agreement on account of the Indebtedness or by virtue of any enforcement by a Finance Party of its rights under this Agreement or by virtue of any relationship between, or transaction involving, the relevant Borrower and any other Borrower or any other Security Party:
 
38.2.1                       exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by a Finance Party or any other person; or
 
38.2.2                       exercise any right of contribution from any other Borrower or any other Security Party under any Finance Document; or
 
38.2.3                       exercise any right of set-off or counterclaim against any other Borrower or any other Security Party; or
 
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38.2.4                       receive, claim or have the benefit of any payment, distribution, security or indemnity from any other Borrower or any other Security Party; or
 
38.2.5                       unless so directed by the Agent (when the relevant Borrower will prove in accordance with such directions), claim as a creditor of any other Borrower or any other Security Party in competition with any Finance Party
 
and each Borrower shall hold in trust for the Finance Parties and forthwith pay or transfer (as appropriate) to the Agent any such payment (including an amount equal to any such set-off), distribution or benefit of such security, indemnity or claim in fact received by it.
 
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Section 12                                       Governing Law and Enforcement
 
39                                            Governing Law
 
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
40                                            Enforcement
 
40.1                                  Jurisdiction of English courts    The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a “ Dispute ”).  Each Party agrees that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
 
This Clause 40.1 is for the benefit of the Finance Parties only.  As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, any Finance Party may take concurrent proceedings in any number of jurisdictions.
 
Each of the Parties to this Agreement hereby irrevocably waives all rights to a trial by jury in any action, proceedings or counterclaim arising out of or relating to this Agreement, the other Finance Documents or the transactions contemplated hereby or thereby.
 
40.2                                  Service of process
 
40.2.1                       Without prejudice to any other mode of service allowed under any relevant law, each Borrower:
 
(a)                                          irrevocably appoints WFW Legal Services Limited at present of 15 Appold Street, London EC2A 2HB, England as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
 
(b)                                          agrees that failure by a process agent to notify that Borrower of the process will not invalidate the proceedings concerned.
 
40.2.2                       If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the relevant Borrower must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Agent.  Failing this, the Agent may appoint another agent for this purpose.
 
This Agreement has been entered into on the date stated at the beginning of this Agreement.
 
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Schedule 1                                     
The Original Lenders
 
Part I
The Original Lenders

Name of Original Lender	 	Commitment	 	
ABN AMRO Capital USA LLC	 	$	60,000,000	 	

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Schedule 2                                     
Part I
Conditions Precedent
 
1                                                   Security Parties
 
(a)                                           Constitutional documents    Copies of the constitutional documents of each Security Party together with such other evidence as the Agent may reasonably require that each Security Party is duly incorporated in its country of incorporation and remains in existence with power to enter into, and perform its obligations under, the Relevant Documents to which it is or is to become a party.
 
(b)                                           Certificates of good standing    A certificate of good standing in respect of each Security Party (if such a certificate can be obtained).
 
(c)                                            Board resolutions    A copy of a resolution of the board of directors of each Security Party:
 
(i)                                               approving the terms of, and the transactions contemplated by, the Relevant Documents to which it is a party and resolving that it execute those Relevant Documents; and
 
(ii)                                            authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or dispatched under those documents) on its behalf.
 
(d)                                           Specimen signatures and copy passports    A specimen of the signature and a copy of the passport, together with proof of address, of each person who executes the Finance Documents pursuant to the resolutions referred to in (c)
 
(e)                                            Officer’s certificates    An original certificate of a duly authorised officer of each Security Party:
 
(i)                                               certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect;
 
(ii)                                            setting out the names of the directors, officers and shareholders of that Security Party (other than the Guarantor) and the proportion of shares held by each shareholder; and
 
(iii)                                         confirming that borrowing or guaranteeing or securing, as appropriate, the Loan would not cause any borrowing, guarantee, security or similar limit binding on that Security Party to be exceeded.
 
(f)                                             Evidence of registration    Where such registration is required or permitted under the laws of the relevant jurisdiction, evidence that
 
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the names of the directors, officers and shareholders of each Security Party are duly registered in the companies registry or other registry in the country of incorporation of that Security Party.
 
(g)                                            Powers of attorney    The original notarially attested and legalised power of attorney of each of the Security Parties under which the Relevant Documents to which it is or is to become a party are to be executed or transactions undertaken by that Security Party.
 
2                                                   Security and related documents
 
(a)                                           Vessel documents    Photocopies of:
 
(i)                                               any charterparty or other contract of employment of the Vessel which will be in force on the Drawdown Date including, without limitation, any Charter;
 
(ii)                                            the on hire certificate pursuant to the relevant Charter (if the  relevant Charter is a time charter) or the protocol of delivery and acceptance evidencing the unconditional physical delivery of the Vessel by the Borrower to the relevant charterer pursuant to the relevant Charter (if the relevant Charter is a bareboat charter);
 
(iii)                                         the Management Agreements;
 
(iv)                                        the Vessel’s current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates;
 
(v)                                           evidence of the Vessel’s current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990;
 
(vi)                                        the Vessel’s current SMC;
 
(vii)                                     the ISM Company’s current DOC;
 
(viii)                                  the Vessel’s current ISSC;
 
(ix)                                        the Vessel’s current IAPPC;
 
(x)                                           the Vessel’s current Tonnage Certificate;
 
in each case together with all addenda, amendments or supplements.
 
(b)                                           Evidence of Borrower’s title   Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the Vessel’s current flag confirming that the Vessel is owned by the Borrower and is free of registered Encumbrances.
 
(c)                                            Registration of Mortgage    Evidence that on the Drawdown Date the Mortgage will be capable of being registered against the Vessel with first priority.
 
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(d)                                           Evidence of insurance    Evidence that the Vessel is insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with (if required by the Agent) the written approval of the Insurances by an insurance adviser appointed by the Agent.
 
(e)                                            Confirmation of class    A Certificate of Confirmation of Class for hull and machinery confirming that the Vessel is classed with the highest class applicable to vessels of her type with Lloyd’s Register or such other classification society as may be acceptable to the Agent free of recommendations affecting class.
 
(f)                                             Inspection report    An inspection report confirming that the condition of the Vessel is in all respects acceptable to the Agent.
 
(g)                                            Valuation    Two valuations of the Vessel (dated not earlier than 30 days before the relevant Drawdown Date from 2 Approved Shipbrokers, addressed to the Agent and certifying the Market Value for the Vessel, in form and substance acceptable to the Agent.
 
(h)                                           Security Documents    The Mortgage and the Assignments in respect of the Vessel, the Guarantee, the Account Security Deed and the Share Charges, together with all other documents required by any of them, including, without limitation, (i) all notices of assignment and/or charge and evidence that those notices will be duly acknowledged by the recipients and (ii) all share certificates, certified copy share registers or registers of members, transfer forms, proxy forms, letters of resignation and letters of undertaking.
 
(i)                                               Mandates    Such duly signed forms of mandate, and/or other evidence of the opening of the Accounts, as the Security Agent may require.
 
(j)                                              Managers’ Undertakings    The Managers’ Undertakings.
 
(k)                                           No disputes    The written confirmation of the Borrowers that there is no dispute under any of the Relevant Documents as between the parties to any such document.
 
(l)                                               Account Holder’s confirmation    The written confirmation of the Account Holder that the Accounts have been opened with the Account Holder and to its actual knowledge are free from Encumbrances other than as created by or pursuant to the Security Documents and rights of set off in favour of the Account Holder as account holder.
 
(m)                                       Other Relevant Documents    Copies of each of the Relevant Documents not otherwise comprised in the documents listed in this Part I of Schedule 2.
 
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3                                                   Legal opinions
 
The following legal opinions, each addressed to the Agent, the Security Agent and the Lenders and capable of being relied upon by any persons who become Lenders pursuant to the primary syndication of the Loan or confirmation satisfactory to the Agent that such opinions will be given:
 
(a)                                           a legal opinion of Stephenson Harwood LLP, legal advisers to the Agent as to English law substantially in the form distributed to the Lenders prior to signing this Agreement;
 
(i)                                               a legal opinion of the following legal advisers to the Agent: Poles, Tublin, Stratakis & Gonzales LLP as to Marshall Islands law and Stephenson Harwood as to Hong Kong law.
 
4                                                   Other documents and evidence
 
(a)                                           Drawdown Request   A duly completed Drawdown Request.
 
(b)                                           Process agent    Evidence that any process agent referred to in Clause 40.2 ( Service of process ) and any process agent appointed under any other Finance Document has accepted its appointment.
 
(c)                                            Other Authorisations    A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Relevant Document or for the validity and enforceability of any Relevant Document.
 
(d)                                           Financial statements    A copy of the Original Financial Statements of each Borrower and the Guarantor.
 
(e)                                            Fees    The Fee Letter and evidence that the fees, costs and expenses then due from the Borrowers under Clause 11 ( Fees ) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the relevant Drawdown Date.
 
(f)                                             “Know your customer” documents    Such documentation and other evidence as is reasonably requested by the Agent in order for the Lenders to comply with all necessary “know your customer” or similar identification procedures in relation to the transactions contemplated in the Finance Documents.
 
(g)                                            Group Structure Chart    A chart showing the structure of the Group.
 
Part II
Conditions Subsequent
 
1                                                   Evidence of Borrower’s title    Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the Vessel’s current flag confirming that (a) the Mortgage has been registered with first priority
 
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against the Vessel and (b) there are no further Encumbrances registered against the Vessel.
 
2                                                   Letters of undertaking    Letters of undertaking in respect of the Insurances as required by the Security Documents together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Finance Parties.
 
3                                                   Acknowledgements of notices    Acknowledgements of all notices of assignment and/or charge given pursuant to any Security Documents received by the Agent pursuant to Part I of this Schedule 2.
 
4                                                   Legal opinions    Such of the legal opinions specified in Part I of this Schedule 2 as have not already been provided to the Agent.
 
5                                                   Companies Act registrations    Evidence that the prescribed particulars of any Security Documents received by the Agent pursuant to Part I of this Schedule 2 have been delivered to any relevant Registry of Companies/Corporations within the statutory time limit.
 
6                                                   Master’s receipt    The master’s receipt for the Mortgage (if applicable).
 
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Part III
Conditions precedent in respect of an Increase Request
 
1                                                   Additional Borrowers
 
(a)                                           Constitutional documents    Copies of the constitutional documents of each Additional Borrower together with such other evidence as the Agent may reasonably require that each Additional Borrower is duly incorporated in its country of incorporation and remains in existence with power to enter into, and perform its obligations under, the Relevant Documents to which it is or is to become a party, and a bringdown certificate for each Security Party in respect of each of the documents provided by that Security Party pursuant to paragraph 1, Part I of Schedule 2.
 
(b)                                           Certificates of good standing    A certificate of good standing in respect of each Additional Borrower (if such a certificate can be obtained).
 
(c)                                            Board resolutions    A copy of a resolution of the board of directors of each Additional Borrower:
 
(ii)                                            approving the terms of, and the transactions contemplated by, the Relevant Documents to which it is a party and resolving that it execute those Relevant Documents; and
 
(iii)                                         authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or dispatched under those documents) on its behalf.
 
(d)                                           Specimen signatures and copy passports    A specimen of the signature and a copy of the passport, together with proof of address, of each person who executes the Finance Documents pursuant to the resolutions referred to in (c).
 
(e)                                            Officer’s certificates    An original certificate of a duly authorised officer of each Additional Borrower:
 
(i)                                               certifying that each copy document relating to it specified in this Part III of Schedule 2 is correct, complete and in full force and effect;
 
(ii)                                            setting out the names of the directors, officers and shareholders of that Additional Borrower and the proportion of shares held by each shareholder; and
 
(iii)                                         confirming that borrowing or guaranteeing or securing, as appropriate, the Loan would not cause any borrowing, guarantee, security or similar limit binding on that Additional Borrower to be exceeded.
 
(f)                                             Evidence of registration    Where such registration is required or permitted under the laws of the relevant jurisdiction, evidence that
 
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the names of the directors, officers and shareholders of each Additional Borrower are duly registered in the companies registry or other registry in the country of incorporation of that Additional Borrower.
 
(g)                                            Powers of attorney    The original notarially attested and legalised power of attorney of each Additional Borrower under which the Relevant Documents to which it is or is to become a party are to be executed or transactions undertaken by that Additional Borrower.
 
2                                                   Security and related documents
 
(a)                                           Vessel documents    Photocopies of:
 
(i)                                               any charterparty or other contract of employment of the Vessel which will be in force on the Drawdown Date including, without limitation, any Charter;
 
(ii)                                            the on hire certificate pursuant to the relevant Charter (if the  relevant Charter is a time charter) or the protocol of delivery and acceptance evidencing the unconditional physical delivery of the Vessel by the Additional Borrower to the relevant charterer pursuant to the relevant Charter (if the relevant Charter is a bareboat charter);
 
(iii)                                         the Management Agreements;
 
(iv)                                        the Vessel’s current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates;
 
(v)                                           evidence of the Vessel’s current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990;
 
(vi)                                        the Vessel’s current SMC;
 
(vii)                                     the ISM Company’s current DOC;
 
(viii)                                  the Vessel’s current ISSC;
 
(ix)                                        the Vessel’s current IAPPC;
 
(x)                                           the Vessel’s current Tonnage Certificate;
 
in each case together with all addenda, amendments or supplements.
 
(b)                                           Evidence of Additional Borrower’s title   Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the Vessel’s current flag confirming that the Vessel is owned by the Additional Borrower and is free of registered Encumbrances.
 
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(c)                                            Registration of Mortgage    Evidence that on the Drawdown Date the Mortgage will be capable of being registered against the Vessel with first priority.
 
(d)                                           Evidence of insurance    Evidence that the Vessel is insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with (if required by the Agent) the written approval of the Insurances by an insurance adviser appointed by the Agent.
 
(e)                                            Confirmation of class    A Certificate of Confirmation of Class for hull and machinery confirming that the Vessel is classed with the highest class applicable to vessels of her type with Lloyd’s Register or such other classification society as may be acceptable to the Agent free of recommendations affecting class.
 
(f)                                             Inspection report    An inspection report confirming that the condition of the Vessel is in all respects acceptable to the Agent.
 
(g)                                            Valuation    Two valuations of the Vessel (dated not earlier than 30 days before the relevant Increase Date from 2 Approved Shipbrokers, addressed to the Agent and certifying the Market Value for the Vessel, in form and substance acceptable to the Agent.
 
(h)                                           Security Documents    The Mortgage and the Assignments in respect of the Vessel, the Guarantor Confirmation, the Account Security Deed, the Share Charges and a deed of confirmation in respect of the Loan Agreement and other Finance Documents, together with all other documents required by any of them, including, without limitation, (i) all notices of assignment and/or charge and evidence that those notices will be duly acknowledged by the recipients and (ii) all share certificates, certified copy share registers or registers of members, transfer forms, proxy forms, letters of resignation and letters of undertaking.
 
(i)                                               Mandates    Such duly signed forms of mandate, and/or other evidence of the opening of the Accounts, as the Security Agent may require.
 
(j)                                              Managers’ Undertakings    The Managers’ Undertakings.
 
(k)                                           No disputes   The written confirmation of the Additional Borrowers that there is no dispute under any of the Relevant Documents as between the parties to any such document.
 
(l)                                               Account Holder’s confirmation    The written confirmation of the Account Holder that the Accounts have been opened with the Account Holder and to its actual knowledge are free from Encumbrances other than as created by or pursuant to the Security
 
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Documents and rights of set off in favour of the Account Holder as account holder.
 
(m)                                       Other Relevant Documents    Copies of each of the Relevant Documents not otherwise comprised in the documents listed in this Part III of Schedule 2.
 
3                                                   Legal opinions
 
The following legal opinions, each addressed to the Agent, the Security Agent and the Lenders and capable of being relied upon by any persons who become Lenders pursuant to the primary syndication of the Loan or confirmation satisfactory to the Agent that such opinions will be given:
 
(a)                                           a legal opinion of Stephenson Harwood LLP, legal advisers to the Agent as to English law substantially in the form distributed to the Lenders prior to signing this Agreement; and
 
(b)                                           a legal opinion of legal advisers to the Agent in respect of the jurisdiction of the Additional Borrower and flag of the Vessel owned by such Additional Borrower.
 
4                                                   Other documents and evidence
 
(a)                                           Drawdown Request   A duly completed Drawdown Request.
 
(b)                                           Process agent    Evidence that any process agent referred to in Clause 40.2 ( Service of process ) and any process agent appointed under any other Finance Document has accepted its appointment.
 
(c)                                            Other Authorisations    A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Additional Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Relevant Document or for the validity and enforceability of any Relevant Document.
 
(d)                                           Financial statements    A copy of the Original Financial Statements of each Additional Borrower.
 
(e)                                            Fees    The Fee Letter and evidence that the fees, costs and expenses then due from the Additional Borrowers under Clause 11 ( Fees ) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the relevant Drawdown Date.
 
(f)                                             “Know your customer” documents    Such documentation and other evidence as is reasonably requested by the Agent in order for the Lenders to comply with all necessary “know your customer” or similar identification procedures in relation to the transactions contemplated in the Finance Documents.
 
(g)                                            Group Structure Chart    A chart showing the structure of the Group.
 
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Part IV
Conditions subsequent in respect of an Increase Request
 
1                                                   Evidence of Additional Borrower’s title    Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the Vessel’s current flag confirming that (a) the Mortgage has been registered with first priority against the Vessel and (b) there are no further Encumbrances registered against the Vessel.
 
2                                                   Letters of undertaking    Letters of undertaking in respect of the Insurances as required by the Security Documents together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Finance Parties.
 
3                                                   Acknowledgements of notices    Acknowledgements of all notices of assignment and/or charge given pursuant to any Security Documents received by the Agent pursuant to Part IV of this Schedule 2.
 
4                                                   Legal opinions    Such of the legal opinions specified in Part IV of this Schedule 2 as have not already been provided to the Agent.
 
5                                                   Companies Act registrations    Evidence that the prescribed particulars of any Security Documents received by the Agent pursuant to Part IV of this Schedule 2 have been delivered to any relevant Registry of Companies/Corporations within the statutory time limit.
 
6                                                   Master’s receipt    The master’s receipt for the Mortgage (if applicable).
 
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Schedule 3           
Drawdown Request
 
From:                [ Borrowers ]
 
To:                              [ Agent ]
 
Dated:
 
Dear Sirs
 
[Borrowers] — [                  ] Loan Agreement dated [                   ] 2015 (the “Agreement”)
 
1                                                   We refer to the Agreement.  This is a Drawdown Request. Terms defined in the Agreement have the same meaning in this Drawdown Request unless given a different meaning in this Drawdown Request.
 
2                                                   We wish to make a Drawing on the following terms:

Proposed Drawdown Date:	 	[              ] (or, if that is not a Business Day, the next Business Day)	
 	 	 	
Currency of Drawing:	 	[              ]	
 	 	 	
Amount:	 	[              ]	
 	 	 	
Interest Period:	 	[              ]	
 	 	 	
[Vessel:	 	[              ]]	
 
3                                                   We confirm that each condition specified in Clause 4.2 ( Further conditions precedent ) is satisfied on the date of this Drawdown Request.
 
4                                                   The proceeds of the Drawing shall be used in or towards financing or refinancing payment of the purchase price of the above vessel or for working capital purposes.
 
5                                                   This Drawdown Request is irrevocable.

Yours faithfully	 	

authorised signatory for	 	
[ names of Borrowers ]	 	
 
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Schedule 4           
Form of Increase Confirmation
 
To:                                       [        ] as Agent and [           ] as Borrowers, for and on behalf of each Security Party
 
From:                         [the Increase Lender ] (the “ Increase Lender ”)
 
Dated:
 
[Borrowers] - [        ] Loan Agreement dated [                     ] 2015 (the “Loan Agreement”)
 
1                                                            We refer to the Loan Agreement.  This is an Increase Confirmation.  This agreement (the “ Agreement ”) shall take effect as an Increase Confirmation for the purpose of the Loan Agreement.  Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
 
2                                                            We refer to Clause 2.2 ( Increase ) of the Loan Agreement. The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the “ Relevant Commitment ”) as if it was an Original Lender under the Loan Agreement.
 
3                                                            The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the “ Increase Date ”) is [           ].
 
4                                                            On the Increase Date the Increase Lender becomes Party to the relevant Finance Documents as a Lender.
 
5                                                            The Facility Office and address, fax number and attention details for notices of the Increase Lender for the purposes of Clause 30.2 ( Addresses ) are set out in the Schedule.
 
6                                                            The Increase Lender expressly acknowledges the limitations on the Lenders’ obligations set out in Clause 2.2.11 ( Increase ).
 
[7/8]                                         This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
 
[8/9]                                         This Agreement [and any non-contractual obligations arising out of or in connection with it] [is/are](i) governed by English law.
 
[9/10]                                  This Agreement has been entered into on the date stated at the beginning of this Agreement.
 
Note:      The execution of this Increase Confirmation may not be sufficient for the Increase Lender to obtain the benefit of the Security Documents in all jurisdictions.  It is the responsibility of the Increase Lender to ascertain whether any other documents or other formalities are required to obtain the benefit of the Security

(i)  This clause should follow the approach adopted as regards non-contractual obligations in Clause 39 ( Governing Law ).  This should be done (and this footnote deleted) before the Agreement is signed.
 
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Documents in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
 
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Schedule 5           
Form of Transfer Certificate
 
To:          [                               ] as Agent
 
From:                         [ The Existing Lender ] (the “ Existing Lender ”) and [ The New Lender ] (the “ New Lender ”)
 
Dated:
 
[Borrowers] — [                  ] Loan Agreement dated [                   ] 2015 (the “Loan Agreement”)
 
1                                                   We refer to the Loan Agreement.  This agreement (the “ Agreement ”) shall take effect as a Transfer Certificate for the purposes of the Loan Agreement.  Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
 
2                                                   We refer to Clause 23.5 ( Procedure for transfer ) of the Loan Agreement:
 
(a)                                           The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation and in accordance with Clause 23.5 ( Procedure for transfer ) all of the Existing Lender’s rights and obligations under the Loan Agreement and the other Finance Documents which relate to that portion of the Existing Lender’s Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule.
 
(b)                                           The proposed Transfer Date is [                                   ].
 
(c)                                            The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 30.2 ( Addresses ) are set out in the Schedule.
 
3                                                   The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in Clause 23.4.1(c) ( Limitation of responsibility of Existing Lenders ).
 
[4/5]                                This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
 
[5/6]                                This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
[6/7]                                This Agreement has been entered into on the date stated at the beginning of this Agreement.
 
Note:                   The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender’s interest in any Encumbrance created or expressed to be created or evidenced by the Security Documents in all jurisdictions.  It is the responsibility of the New Lender to ascertain whether
 
130 

 
any other documents or other formalities are required to perfect a transfer of such a share in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
 
131 

 
The Schedule
 
Commitment/rights and obligations to be transferred
 
[ insert relevant details ]
 
[ Facility Office address, fax number and attention details for notices and account details for payments, ]

[Existing Lender]	[New Lender]	
 	 	
By:	By:	
 
This Agreement is accepted as a Transfer Certificate for the purposes of the Loan Agreement by the Agent and the Transfer Date is confirmed as [                         ].
 
[Agent]
 
By:
 
132 

 
Schedule 6           
Form of Assignment Agreement
 
To:                                       [        ] as Agent and [           ] as Borrowers, for and on behalf of each Security Party
 
From:                         [the Existing Lender ] (the “ Existing Lender ”) and [the New Lender ] (the “ New Lender ”)
 
Dated:
 
[Borrowers] - [        ] Loan Agreement dated [                     ] 2015 (the “Loan Agreement”)
 
1                                                            We refer to the Loan Agreement.  This is an Assignment Agreement.  This agreement (the “ Agreement ”) shall take effect as an Assignment Agreement for the purpose of the Loan Agreement.  Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
 
2                                                            We refer to Clause 23.6 ( Procedure for assignment ) of the Loan Agreement:
 
(a)                                 The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Loan Agreement, the other Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents which correspond to that portion of the Existing Lender’s Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule.
 
(b)                                 The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender’s Commitment(s) and participations in the Loan under the Loan Agreement specified in the Schedule.
 
(c)                                  The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b).
 
3                                                            The proposed Transfer Date is [      ].
 
4                                                            On the Transfer Date the New Lender becomes Party to the relevant Finance Documents as a Lender.
 
5                                                            The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 30.2 ( Addresses ) are set out in the Schedule.
 
6                                                            The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in Clause 23.4.3 ( Limitation of responsibility of Existing Lenders ).
 
133 

 
[7/8]                                         This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 23.7 ( Copy of Transfer Certificate or Assignment Agreement to Borrowers ), to the Borrowers (on behalf of each Security Party) of the assignment referred to in this Agreement.
 
[8/9]                                         This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
 
[9/10]                                  This Agreement [and any non-contractual obligations arising out of or in connection with it] [is/are](ii) governed by English law.
 
[10/11]                           This Agreement has been entered into on the date stated at the beginning of this Agreement.
 
Note:                                     The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender’s interest in any Encumbrance created or expressed to be created or evidenced by the Security Documents in all jurisdictions.  It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

(ii)  This clause should follow the approach adopted as regards non-contractual obligations in Clause 39 ( Governing Law ).  This should be done (and this footnote deleted) before the Agreement is signed.
 
134 

 
The Schedule
 
Commitment/rights and obligations to be transferred by assignment, release and accession
 
[ insert relevant details ]
 
[ Facility office address, fax number and attention details for notices and account details for p ayments ]

[Existing Lender]	[New Lender]	
 	 	
By:	By:	
 
This Agreement is accepted as an Assignment Agreement for the purposes of the Loan Agreement by the Agent and the Transfer Date is confirmed as [                    ].
 
Signature of this Agreement by the Agent constitutes confirmation by the Agent of receipt of notice of the assignment referred to in this Agreement, which notice the Agent receives on behalf of each Finance Party.
 
[Agent]
 
By:
 
135 

 
Schedule 7           
Form of Accession Deed
 
To:                                       ABN AMRO Capital USA LLC as Agent and ABN AMRO Capital USA LLC as Security Agent for itself and each of the other Finance Parties
 
From:        [Borrowers]
 
Dated:
 
Dear Sirs
 
[Borrowers] — Loan Agreement dated [                   ] 2015 (the “Agreement”)
 
1                                                   We refer to the Agreement.  This deed (the “ Accession Deed ”) shall take effect as an Accession Deed for the purposes of the Agreement.  Terms defined in the Agreement have the same meaning in paragraphs 1-[3][4] of this Accession Deed unless given a different meaning in this Accession Deed.
 
2                                                   [Member of the Group] agrees to become an Additional Borrower and to be bound by the terms of the Agreement and the other Finance Documents as an Additional Borrower pursuant to Clause 24.2 ( Additional Borrowers ) of the Agreement.  [Member of the Group] is a company duly incorporated under the laws of [name of relevant jurisdiction] and is a limited liability company and registered number [                   ].
 
3                                                   [Each Borrower confirms that no Default is continuing or would occur as a result of [Member of the Group] becoming an Additional Borrower.]
 
[3][4]                            [Member of the Group’s] administrative details for the purposes of the Agreement are as follows:
 
Address:
 
Fax No.:
 
Attention:
 
This Accession Deed and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
This Accession Deed has been signed on behalf of the Borrowers and executed as a deed by [Member of the Group] and is delivered on the date stated above.
 
136 

 

[Member of the Group]	 	
 	 	
[ Executed as a Deed	)	
By: [Member of the Group]	)	

 	 	Director	
 	 	 	
 	 	Director/Secretary]	
 
or

[ Executed as a Deed	 	 	
 	 	 	
By: [Member of the Group]	 	 	
 	 	 	
 	 	Signature of Director	

 	 	Name of Director	
in the presence of	 	 	
 	 	Signature of witness	
 	 	 	
 	 	Name of witness	
 	 	 	
 	 	Address of witness	

 	 	 	

 	 	 	
 	 	 	
 	 	Occupation of witness]	

The Borrowers

 	 	

By:	 	
 
137 

 
Schedule 8                                     
Form of Compliance Certificate
 
To:                              [ Agent ]
 
From:                [ Borrower ][ Guarantor ]
 
Dated:
 
Dear Sirs
 
[Borrowers] — [                  ] Loan Agreement dated [                   ] 2015 (the “Agreement”)
 
1                                                   We refer to the Agreement.  This is a Compliance Certificate.  Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
 
2                                                   We confirm that:  [Insert details of covenants to be certified]
 
3                                                   [We confirm that no Default is continuing.]*

Signed:	 	 	 	
 	 	 	 	
 	Director	 	Director	
 	 	 	 	
 	of	 	of	
 	 	 	 	
 	[ Borrower ] [ Guarantor ]	 	[ Borrower ] [ Guarantor ]	
 
[ insert applicable certification language ]**

[	 	 	
for and on behalf of	 	
[ name of auditors of the Borrower ]]	 	

* If this statement cannot be made, the certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it.
 
138 

 

Signatures	 	 	
 	 	 	
The Original Borrowers	 	 	
 	 	 	
Genco Commodus Limited	)	 	
By: Apostolos Zafolias	)	 	
 	)	 	
Address: c/o Genco Shipping & Trading	)	/s/ Apostolos Zafolias	 	
Limited)	)	 	 	
299 Park Avenue, 12 th  Floor, New York,	)	 	 	
NY 10171	)	 	 	
Fax no.: +1 646 443 8555	)	 	 	
Email: john.wobensmith@gencoshipping.com	)	 	 	
Department/Officer: John Wobensmith	)	 	 	

Genco Maximus Limited	)	 	 	
By: Apostolos Zafolias	)	 	 	
 	)	 	 	
Address: c/o Genco Shipping & Trading	)	/s/ Apostolos Zafolias	 	
Limited)	)	 	 	
299 Park Avenue, 12 th  Floor, New York,	)	 	 	
NY 10171	)	 	 	
Fax no.: +1 646 443 8555	)	 	 	
Email: john.wobensmith@gencoshipping.com	)	 	 	
Department/Officer: John Wobensmith	)	 	 	

Genco Claudius Limited	)	 	 	
By: Apostolos Zafolias	)	 	 	
 	)	 	 	
Address: c/o Genco Shipping & Trading	)	/s/ Apostolos Zafolias	 	
Limited)	)	 	 	
299 Park Avenue, 12 th  Floor, New York,	)	 	 	
NY 10171	)	 	 	
Fax no.: +1 646 443 8555	)	 	 	
Email: john.wobensmith@gencoshipping.com	)	 	 	
Department/Officer: John Wobensmith	)	 	 	
 
139 

 

Genco Hunter Limited	)	 	
By: Apostolos Zafolias	)	 	 	
 	)	 	 	
Address: c/o Genco Shipping & Trading	)	/s/ Apostolos Zafolias	 	
Limited)	)	 	 	
299 Park Avenue, 12 th  Floor, New York,	)	 	 	
NY 10171	)	 	 	
Fax no.: +1 646 443 8555	)	 	 	
Email: john.wobensmith@gencoshipping.com	)	 	 	
Department/Officer: John Wobensmith	)	 	 	

Genco Warrior Limited	)	 	 	
By: Apostolos Zafolias	)	 	 	
 	)	 	 	
Address: c/o Genco Shipping & Trading	)	/s/ Apostolos Zafolias	 	
Limited)	)	 	 	
299 Park Avenue, 12 th  Floor, New York,	)	 	 	
NY 10171	)	 	 	
Fax no.: +1 646 443 8555	)	 	 	
Email: john.wobensmith@gencoshipping.com	)	 	 	
Department/Officer: John Wobensmith	)	 	 	

The Arranger	 	 	 	
 	 	 	 	
ABN AMRO Capital USA LLC	)	 	 	
By: Sarah Yeowart	)	 	 	
      Attorney-in-fact	)	 	 	
Address: 100 Park Avenue, 17 th  Floor,	)	/s/ Sarah Yeowart	 	
New York, New York 10017	)	 	 	
Fax no.: +1 917 284 6697	)	 	 	
Email:	)	 	 	
AABUS_NY_AGENCY@ABNAMRO.COM	)	 	 	
Department/Officer: Wudasse Zaudou /	)	 	 	
Ryan Masajo	)	 	 	
 
140 

 

The Agent	 	 	
 	 	 	
ABN AMRO Capital USA LLC	)	 	
By: Sarah Yeowart	)	 	 	
      Attorney-in-fact	)	 	 	
Address: 100 Park Avenue, 17 th  Floor,	)	/s/ Sarah Yeowart	 	
New York, New York 10017	)	 	 	
Fax no.: +1 917 284 6697	)	 	 	
Email:	)	 	 	
AABUS_NY_AGENCY@ABNAMRO.COM	)	 	 	
Department/Officer: Wudasse Zaudou /	)	 	 	
Ryan Masajo	)	 	 	

The Security Agent	 	 	 	
 	 	 	 	
ABN AMRO Capital USA LLC	)	 	 	
By: Sarah Yeowart	)	 	 	
      Attorney-in-fact	)	 	 	
Address: 100 Park Avenue, 17 th  Floor,	)	/s/ Sarah Yeowart	 	
New York, New York 10017	)	 	 	
Fax no.: +1 917 284 6697	)	 	 	
Email:	)	 	 	
AABUS_NY_AGENCY@ABNAMRO.COM	)	 	 	
Department/Officer: Wudasse Zaudou /	)	 	 	
Ryan Masajo	)	 	 	

The Original Lenders	 	 	 	
 	 	 	 	
ABN AMRO Capital USA LLC	)	 	 	
By: Sarah Yeowart	)	/s/ Sarah Yeowart	 	
      Attorney-in-fact	 	 	 	
 
141 

Exhibit 10.3
 
Guarantee
 
Dated  7 April  2015
 
(1)                                  Genco Shipping & Trading Limited
 
to
 
(2)                                  ABN AMRO Capital USA LLC

 

 
Contents

 	 	Page	
 	 	 	
1	Definitions and Interpretation	1	
 	 	 	
2	Guarantee and Indemnity	2	
 	 	 	
3	Protection of Finance Parties	2	
 	 	 	
4	Additional Payment Obligations	5	
 	 	 	
5	Application of Moneys	6	
 	 	 	
6	Representations and Warranties	7	
 	 	 	
7	Information Undertakings	7	
 	 	 	
8	Financial Covenants	10	
 	 	 	
9	General Undertakings	11	
 	 	 	
10	Payments	12	
 	 	 	
11	Set-Off	13	
 	 	 	
12	Calculations and Certificates	13	
 	 	 	
13	Partial Invalidity	13	
 	 	 	
14	Remedies and Waivers	13	
 	 	 	
15	Miscellaneous Provisions of the Loan Agreement	13	
 	 	 	
16	Notices	14	
 	 	 	
17	Governing Law	14	
 	 	 	
18	Enforcement	14	
 	 	 	
Schedule 1	Form of Compliance Certificate	16	

 
Guarantee
 
Dated  7 April  2015
 
By:
 
(1)                                           Genco Shipping & Trading Limited , a company incorporated according to the law of the Republic of the Marshall Islands, whose principal place of business is at 299 Park Avenue, 17 th  Floor, New York, New York 10171 (the “ Guarantor ”)
 
In favour of:
 
(2)                                           ABN AMRO Capital USA LLC acting through its office at 100 Park Avenue, 17 th  Floor, New York, NY 10017, USA (the “ Security Agent ”).
 
Whereas:
 
(A)                                         Each of the banks listed in Schedule 1 to the Loan Agreement (as defined below) (collectively the “ Lenders ”) has agreed to lend to Genco Claudius Limited, Genco Commodus Limited, Genco Hunter Limited, Genco Maximus Limited and Genco Warrior Limited on a joint and several basis (the “ Borrowers ”) its participation in a loan of up to sixty million Dollars ($60,000,000) as may be increased to one hundred and fifty million Dollars ($150,000,000) (the “ Loan ”) on the terms and subject to the conditions set out in a loan agreement dated 7 April 2015 made between the Borrowers (as borrowers), the Lenders (as lenders), ABN AMRO Capital USA LLC as arranger (the “ Arranger ”), ABN AMRO Capital USA LLC as agent for the Lenders (the “ Agent ”) and the Security Agent (as security agent) (the “ Loan Agreement ”).
 
(B)                                         Pursuant to the Loan Agreement, and as a condition precedent to the several obligations of the Lenders to make the Loan available to the Borrowers, the Borrowers have, amongst other things, agreed to procure that the Guarantor execute and deliver this Guarantee in favour of the Security Agent as security agent for the Finance Parties.
 
This Deed witnesses   as follows:
 
1                                                   Definitions and Interpretation
 
1.1                                         Definitions    In this Guarantee:
 
“ Compliance Certificate ” means a certificate substantially in the form set out in Schedule 1 to this Guarantee.
 
“ Default Rate ” means interest at the rate calculated in accordance with clause 8.3 of the Loan Agreement ( Default interest ).
 
“ Guarantor Liabilities ” means all of the liabilities and obligations of the Guarantor to any of the Finance Parties under or pursuant to this Guarantee, from time to time, whether in respect of principal, interest, costs or otherwise and whether present, future, actual or contingent.
 
1 

 
“ Guarantor Security Documents ” means this Guarantee and any and all documents which may at any time be executed by the Guarantor as security for the payment of all or any part of the Guarantor Liabilities and “ Guarantor Security Document ” means any one of them.
 
“ Indebtedness ” means the aggregate from time to time of: the amount of the Loan outstanding; all accrued and unpaid interest on the Loan; and all other sums of any nature (together with all accrued and unpaid interest on any of those sums) payable by the Borrowers or any of them to any of the Finance Parties under all or any of the Finance Documents.
 
“ Original Financial Statements ” means the audited consolidated financial statements of the Guarantor for the financial year ended 31 December 2014.
 
1.2                                         Defined terms   Unless otherwise specified in this Guarantee, or unless the context otherwise requires, all words and expressions defined in the Loan Agreement shall have the same meaning when used in this Guarantee.
 
1.3                                         Construction   Clause 1.2 of the Loan Agreement ( Construction ) shall apply to this Guarantee as if it were incorporated into it with any necessary modifications.
 
1.4                                         Headings    Clause and Schedule headings are for ease of reference only.
 
1.5                                         Third party rights    A person who is not a party to this Guarantee (other than a Finance Party) has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Guarantee.
 
2                                                   Guarantee and Indemnity
 
The Guarantor irrevocably and unconditionally:
 
2.1                                         guarantees to each Finance Party punctual performance by the Borrowers of all the Borrowers’ obligations under the Finance Documents;
 
2.2                                         undertakes with each Finance Party that whenever the Borrowers do not pay any amount when due under or in connection with any Finance Document, the Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and
 
2.3                                         agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of the Borrowers not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by them under any Finance Document on the date when it would have been due.  The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Guarantee if the amount claimed had been recoverable on the basis of a guarantee.
 
3                                                   Protection of Finance Parties
 
3.1                                         Continuing Guarantee    This Guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Security Party under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
 
2 

 
3.2                                         Reinstatement    If any discharge, release or arrangement (whether in respect of the obligations of any Security Party or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantor under this Guarantee will continue or be reinstated as if the discharge, release or arrangement had not occurred.
 
3.3                                         Waiver of defences    The obligations of the Guarantor under this Guarantee will not be affected by an act, omission, matter or thing which, but for this Clause 3.3, would reduce, release or prejudice any of its obligations under this Guarantee (without limitation and whether or not known to it or any Finance Party) including:
 
3.3.1                              any time, waiver or consent granted to, or composition with, any Security Party or other person;
 
3.3.2                              the release of any other Security Party or any other person under the terms of any composition or arrangement with any creditor of any Security Party or any other member of the Group;
 
3.3.3                              the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Security Party or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
 
3.3.4                              any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Security Party or any other person;
 
3.3.5                              any amendment, novation, supplement, extension restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under any Finance Document or other document or security;
 
3.3.6                              any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
 
3.3.7                              any insolvency or similar proceedings.
 
3.4                                         Guarantor intent    Without prejudice to the generality of Clause 3.3, the Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following:  business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such
 
3 

 
facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
 
3.5                                         Immediate recourse    The Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this Guarantee.  This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
 
3.6                                         Appropriations    Until all amounts which may be or become payable by the Security Parties under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
 
3.6.1                              refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and
 
3.6.2                              hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of any of the Guarantor Liabilities.
 
3.7                                         Deferral of Guarantors’ rights    Until all amounts which may be or become payable by the Security Parties under or in connection with the Finance Documents have been irrevocably paid in full and unless the Security Agent otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Guarantee:
 
3.7.1                              to be indemnified by a Security Party;
 
3.7.2                              to claim any contribution from any other guarantor of any Security Party’s obligations under the Finance Documents;
 
3.7.3                              to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
 
3.7.4                              to bring legal or other proceedings for an order requiring any Security Party to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 2;
 
3.7.5                              to exercise any right of set-off against any Security Party; and/or
 
3.7.6                              to claim or prove as a creditor of any Security Party in competition with any Finance Party.
 
If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Security Parties under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to
 
4 

 
the Security Agent or as the Security Agent may direct for application in accordance with clause 28 of the Loan Agreement ( Payment Mechanics ).
 
3.8                                         Additional security    This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
 
4                                                   Additional Payment Obligations
 
4.1                                         Indemnity to the Security Agent    The Guarantor shall promptly indemnify the Security Agent and every Receiver and Delegate on demand against any cost, loss or liability incurred by any of them as a result of:
 
4.1.1                              any failure by the Borrowers to comply with their obligations under clause 16 of the Loan Agreement ( Costs and Expenses );
 
4.1.2                              acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
 
4.1.3                              the taking, holding, protection or enforcement of the Security Documents;
 
4.1.4                              the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;
 
4.1.5                              any default by any Security Party in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or
 
4.1.6                              acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property (otherwise, in each case, than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct),
 
together in each case with interest at the Default Rate on the amount demanded from the date of demand until the date of payment, both before and after judgment, which interest shall be compounded with the amount demanded at the end of such periods as the Security Agent may reasonably select.
 
4.2                                         Currency indemnity    If any sum due from the Guarantor under this Guarantee (a “ Sum ”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “ First Currency ”) in which that Sum is payable into another currency (the “ Second Currency ”) for the purpose of:
 
4.2.1                              making or filing a claim or proof against the Guarantor, or
 
4.2.2                              obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
the Guarantor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (a) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to that Finance Party at the time of its receipt of that Sum.
 
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The Guarantor waives any right it may have in any jurisdiction to pay any amount under this Guarantee in a currency or currency unit other than that in which it is expressed to be payable.
 
4.3                                         Amendment costs    If (a) the Guarantor requests an amendment, waiver or consent in relation to any Guarantor Security Document or (b) an amendment is required under clause 28.11 of the Loan Agreement ( Change of currency ), the Guarantor shall, within three Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.
 
4.4                                         Enforcement and preservation costs    The Guarantor shall, within three Business Days of demand, pay to each Finance Party and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Guarantor Security Document and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Guarantor Security Documents or enforcing those rights.
 
4.5                                         Default interest    If the Guarantor fails to pay any amount payable by it under this Guarantee on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) either (a) at the rate (if any) applicable to that amount under the Loan Agreement or (b) (if there is no such rate) at a rate calculated in accordance with clause 8.3 of the Loan Agreement ( Default interest ).  Any interest accruing under this Clause 4.5 shall be immediately payable by the Guarantor on demand by the Security Agent.
 
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.
 
4.6                                         Additional payment obligations under the Loan Agreement    This Clause 4 is without prejudice to the Guarantor Liabilities in respect of the Borrowers’ obligations under the clauses of the Loan Agreement numbered 8 ( Interest ), 14 ( Other Indemnities ) and 16 ( Costs and Expenses ) and under similar provisions in any other Finance Documents.
 
5                                                   Application of Moneys
 
5.1                                         Moneys received by Finance Parties    All sums which any Finance Party (other than the Security Agent) receives (including by way of set-off) under or in connection with any Guarantor Security Document, otherwise than by payment from the Security Agent, shall be paid to the Security Agent immediately on receipt, and that payment to the Security Agent shall be deemed to have been made by the Guarantor rather than by the receiving Finance Party.
 
5.2                                         Moneys received by Security Agent    All sums which the Security Agent receives under or in connection with any Guarantor Security Document shall, unless otherwise agreed by the Security Agent or otherwise provided in the Loan Agreement, be applied by the Security Agent in or towards satisfaction of, or retention on account
 
6 

 
for, the Guarantor Liabilities in such manner as the Security Agent may in its discretion determine.
 
5.3                                         Suspense account    The Security Agent may place any money received by it under or in connection with any Guarantor Security Document to the credit of a suspense account on such terms and subject to such conditions as the Security Agent may in its discretion determine for so long as the Security Agent thinks fit without any obligation in the meantime to apply that money in or towards discharge of the Indebtedness, and, despite such payment, the Security Agent may claim against any of the other Security Parties or prove in the bankruptcy, liquidation or insolvency of any of the other Security Parties for the whole of the Indebtedness at the date of the Security Agent’s demand for payment pursuant to this Guarantee, together with all interest, commission, charges and expenses accruing subsequently.
 
6                                                   Representations and Warranties
 
6.1                                         Representations    The Guarantor makes the representations and warranties set out in this Clause 6 to each Finance Party.
 
6.1.1                              Loan Agreement representations and warranties    All representations and warranties given by the Borrowers in the Loan Agreement in respect of the Guarantor and/or any Guarantor Security Document are and will remain correct and none of them is or will become misleading.
 
6.1.2                              Ownership of Borrowers   Each of the Borrowers is a wholly owned subsidiary of the Guarantor.
 
6.1.3                              Disclosure of material facts    The Guarantor is not aware of any material facts or circumstances which have not been disclosed to the Security Agent and which might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by the Loan Agreement available to the Borrowers.
 
6.1.4                              Copy Loan Agreement   The Guarantor has received a copy of the Loan Agreement and approves of, and agrees to, the terms and conditions of the Loan Agreement.
 
6.2                                         Repetition    Each Repeating Representation is deemed to be repeated by the Guarantor by reference to the facts and circumstances then existing on the date of each Drawdown Request, on each Drawdown Date, on the first day of each Interest Period and, in the case or those contained in clauses 18.1.11(d) and 18.1.11(f) of the Loan Agreement and for so long as any amount is outstanding under the Finance Documents or any Commitment is in force, on each day.
 
7                                                   Information Undertakings
 
The undertakings in this Clause 7 remain in force for the duration of the Facility Period.
 
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7.1                                         Financial statements
 
The Guarantor shall supply to the Security Agent as soon as the same become available, but in any event within ninety (90) days after the end of each of its financial years:
 
7.1.1                              the Guarantor’s audited consolidated (so as to include inter alia the Borrowers and Baltic Trading Limited and its Subsidiaries) financial statements for that financial year;
 
7.1.2                              Baltic Trading Limited’s audited consolidated financial statements for that financial year (if applicable);
 
7.1.3                              the Guarantor’s unaudited financial statements for that financial year (including the Borrowers and the other Subsidiaries of the Borrower but excluding Baltic Trading Limited and its Subsidiaries) together with the calculations and documentation that the Agent and the Security Agent may deem necessary in order to make the necessary reconciliations and off-setting against the financial statements referred to in clause 7.1.1 and 7.1.2 above; and
 
7.1.4                              each Borrower’s annual management accounts (balance sheet and profit and loss accounts) at the time that the relevant Compliance Certificate is presented pursuant to Clause 7.3.
 
7.2                                         Interim financial statements
 
The Guarantor shall, and shall procure that each Borrower shall, supply to the Security Agent as soon as the same become available, but in any event within forty five (45) days after the end of each quarter during each of its financial years:
 
7.2.1                              the Guarantor’s consolidated (so as to include inter alia the Borrowers and Baltic Trading Limited and its subsidiaries) quarterly financial statements for that quarter;
 
7.2.2                              Baltic Trading Limited’s unaudited consolidated financial statements for that quarter (if applicable);
 
7.2.3                              the Guarantor’s unaudited financial statements for that quarter (including the Borrowers and the other Subsidiaries of the Guarantor but excluding Baltic Trading Limited and its Subsidiaries) together with the calculations and documentation that the Agent and the Security Agent may deem necessary in order to make the necessary reconciliations and off-setting against the financial statements referred to in Clause 7.2.1 and 7.2.2 above; and
 
7.2.4                              each Borrowers’ quarterly management accounts (balance sheet and profit and loss accounts) at the time that the relevant Compliance Certificate is presented pursuant to Clause 7.3.
 
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7.3                                         Compliance Certificate
 
7.3.1                              The Guarantor shall supply to the Security Agent, with each set of its annual financial statements delivered pursuant to Clause 7.1 and each set of its quarterly financial statements delivered pursuant to Clause 7.2, a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 8 as at the date as at which those financial statements were drawn up.
 
7.3.2                              Each Compliance Certificate shall be signed by an authorised officer of the Guarantor.
 
7.3.3                              If prior to the delivery of any Compliance Certificate by the Guarantor, the Guarantor becomes aware that the financial covenants detailed in Clause 8 ( Financial Covenants ) (or any of them) will not be complied with, the Guarantor shall promptly notify the Agent accordingly.
 
7.4                                         Requirements as to financial statements
 
Each set of financial statements delivered by the Chief Financial Officer under Clause 7.1 ( Financial statements ):
 
7.4.1                              shall be certified by the Chief Financial Officer as giving a true and fair view of (in the case of annual financial statements), or fairly representing (in other cases), its financial condition as at the date as at which those financial statements were drawn up;
 
7.4.2                              shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Security Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Security Agent:
 
(a)                                          a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and
 
(b)                                          sufficient information, in form and substance as may be reasonably required by the Security Agent, to enable the Security Agent to determine whether Clause 8 ( Financial Covenants ) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.
 
Any reference in this Guarantee to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
 
7.5                                         Information: miscellaneous    The Guarantor shall supply to the Security Agent (in sufficient copies for all the Lenders, if the Security Agent so requests, except in the case of Clause 7.5.1 where such documents are publicly filed with the SEC):
 
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7.5.1                              at the same time as they are dispatched, copies of all documents dispatched by the Guarantor to its shareholders generally (or any class of them) or to its creditors generally (or any class of them);
 
7.5.2                              promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Security Party, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;
 
7.5.3                              promptly, such information as the Security Agent may reasonably require about the Charged Property and compliance of the Security Parties with the terms of any Security Documents including without limitation cash flow analyses and details of the operating costs of any Vessel and annual inspection certificates (including any annual inspection report (if required by the Agent); and
 
7.5.4                              promptly on request, such further information regarding the financial condition, assets and operations of any Security Party (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Security Party under this Agreement and an up to date copy of its shareholders’ register (or equivalent in its Original Jurisdiction)) as any Finance Party through the Security Agent may reasonably request.
 
7.6                                         Notification of default    The Guarantor shall notify the Security Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.
 
8                                                   Financial Covenants
 
8.1                                         At each and all times during the Facility Period, the Guarantor shall procure that the Borrowers shall maintain cash in the Earnings Accounts for m.v. “GENCO COMMODUS” free of Encumbrances (other than in favour of the Security Agent) in an amount of not less than $750,000 per mortgaged Vessel which is subject to a Mortgage in favour of the Security Agent.
 
8.2                                         At each and all times during the Facility Period the Guarantor shall in respect of the Guarantor only:
 
8.2.1                              maintain cash and Cash Equivalents (including available but undrawn working capital lines with an availability period of more than 6 months) in an amount of not less than $750,000 per Fleet Vessel of which a minimum amount of $25,000,000 shall be in Cash and Cash Equivalents (excluding available working capital lines); and
 
8.2.2                              not permit its maximum Leverage to exceed seventy per cent (70%); and
 
8.2.3                              not permit its Consolidated Net Worth to be less than the Minimum Consolidated Net Worth,
 
which covenants shall be tested upon receipt of the interim financial statements delivered to the Agent pursuant to clause 19.2 of the Loan Agreement ( Interim Financial statements ) for a period ending on each Quarter Date for the first three
 
10 

 
Quarter Dates in each financial year and on the final Quarter Date in each calendar year upon receipt of the annual financial statements delivered pursuant to clause 19.1.1 of the Loan Agreement ( Financial Statements ).
 
8.3                                         In the event that any member of the Group enters into a revolving or term loan facility in respect of the Vessels with other lenders or financial institutions (where such loan facility has a structure that is considered usual and customary of a ship finance facility), on terms and conditions such that any financial covenants analogous to the covenants set out in clause 20.1 or clause 20.2 of the Loan Agreement or the margin under such loan facility are, in the Agent’s opinion, on more favourable terms to those lenders or financial institutions, the Borrowers and the Guarantor undertake to provide the same terms and conditions to the Finance Parties on the terms and conditions to be agreed between the Agent (acting on the instructions of all the Lenders), the Borrowers and the Guarantor.  In addition, should the lenders or financial institutions under other existing loan facilities (outstanding at the time of signing the Loan Agreement) to the Guarantor or any other member of the Group not provide a waiver of certain covenants that the Guarantor has requested, such covenants shall apply under this Agreement on the terms and conditions to be agreed between the Agent (acting on the instructions of the Lenders), the Borrowers and the Guarantor.
 
9                                                   General Undertakings
 
The undertakings in this Clause 9 remain in force for the duration of the Facility Period.
 
9.1                                         No security   The Guarantor has not taken, and will not take without the prior written consent of the Security Agent (and then only on such terms and subject to such conditions as the Security Agent may impose), any security from any of the other Security Parties in connection with this Guarantee, and any security taken by the Guarantor notwithstanding this Clause 9.1 shall be held by the Guarantor in trust for the Finance Parties absolutely as a continuing security for the Guarantor Liabilities.
 
9.2                                         Hedging    The Guarantor shall not enter into any agreement relating to interest or currency exchange transactions which correspond to a notional amount which is greater than the Total Net Debt based on the consolidated financial statements of the Guarantor most recently provided to the Security Agent pursuant to Clause 7.1.
 
9.3                                         Loan Agreement undertakings   The Guarantor will observe and perform any and all covenants and undertakings in the Loan Agreement whose observance and performance by the Guarantor the Borrowers have undertaken to procure.
 
9.4                                         Further assurance
 
9.4.1                              The Guarantor shall (and shall procure that each other Security Party shall) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):
 
11 

 
(a)                                           to perfect any Encumbrance created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;
 
(b)                                           to confer on the Security Agent or confer on the Finance Parties an Encumbrance over any property and assets of the Guarantor (or that other Security Party as the case may be) located in any jurisdiction equivalent or similar to the Encumbrance intended to be conferred by or pursuant to the Security Documents; and/or
 
(c)                                            to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents.
 
9.4.2                              The Guarantor shall (and shall procure that each other Security Party shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Encumbrance conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents.
 
10                                            Payments
 
10.1                                  Payments to the Security Agent    On each date on which the Guarantor is required to make a payment under any Guarantor Security Document, the Guarantor shall make the same available to the Security Agent for value on the due date at the time and in such funds specified by the Security Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
 
Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Security Agent specifies.
 
10.2                                  No set-off by Guarantor    All payments to be made by the Guarantor under any Guarantor Security Document shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
 
10.3                                 Business Days    Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
 
10.4                                  Currency of payments
 
10.4.1                       Subject to Clauses 10.4.2 and 10.4.3, any amount payable under this Guarantee is payable in dollars.
 
10.4.2                       Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
 
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10.4.3                       Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
 
10.5                                  Tax gross-up    The clauses of the Loan Agreement numbered 12 ( Tax Gross Up and Indemnities ) and 15 ( Mitigation by the Lenders ) (in so far as that clause 15 applies to that clause 12) shall apply to this Guarantee as if they were incorporated into it with any necessary modifications.
 
11                                            Set-Off
 
A Finance Party may set off any matured obligation due from the Guarantor under any Guarantor Security Document (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to the Guarantor, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
 
12                                            Calculations and Certificates
 
12.1                                  Accounts    In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by any relevant Finance Party are prima facie evidence of the matters to which they relate.
 
12.2                                  Certificates and determinations    Any certification or determination by any relevant Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
 
13                                            Partial Invalidity
 
If, at any time, any provision of any Guarantor Security Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
 
14                                            Remedies and Waivers
 
No failure to exercise, nor any delay in exercising, on the part of any Finance Party or Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document.  No election to affirm any Finance Document on the part of any Finance Party or Secured Party shall be effective unless it is in writing.  No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in this Guarantee and any other Guarantor Security Document are cumulative and not exclusive of any rights or remedies provided by law.
 
15                                           Miscellaneous Provisions of the Loan Agreement
 
The following clauses of the Loan Agreement shall apply to this Guarantee as if they were incorporated into it with any necessary modifications:
 
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clause 27 ( Sharing among the Finance Parties );
 
clause 34 ( Amendments and Waivers );
 
clause 35 ( Confidentiality ); and
 
clause 37 ( Counterparts ).
 
16                                            Notices
 
16.1                                  Addresses    The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each party for any communication or document to be made or delivered under or in connection with this Guarantee and any other Guarantor Security Document is:
 
16.1.1                       in the case of the Guarantor,
 
Genco Shipping & Trading Limited
299 Park Avenue, 12 th  Floor, New York,
NY 10171
Fax no.: +1 646 443 8555                                   
Email: john.wobensmith@gencoshipping.com
Department/Officer: John Wobensmith; and
 
16.1.2                       in the case of the Security Agent,
 
100 Park Avenue, 17 th  Floor,
New York, New York 10017
Fax no.: +1 917 284 6697
Email: AABUS_NY_AGENCY@ABNAMRO.COM 
Department/Officer: Wudasse Zaudou/ Ryan Masajo
 
or any substitute address, fax number, or department or officer as the party may notify to the other by not less than five Business Days’ notice.
 
16.2                                  Loan Agreement provisions    The clauses of the Loan Agreement numbered 30.1 ( Communications in writing ), 30.3 ( Delivery ), 30.6 ( Electronic communication ) and 30.7 ( English language ) shall apply to any notice or demand under or in connection with this Guarantee.
 
17                                            Governing Law
 
This Guarantee and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
18                                           Enforcement
 
18.1                                  Jurisdiction of English courts    The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Guarantee (including a dispute relating to the existence, validity or termination of this Guarantee or any non-contractual obligation arising out of or in connection with this Guarantee) (a “ Dispute ”).  The Guarantor agrees that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly it will not argue to the contrary.
 
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This Clause 18.1 is for the benefit of the Security Agent only.  As a result, the Security Agent shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Security Agent may take concurrent proceedings in any number of jurisdictions.
 
18.2                                  Service of process
 
18.2.1                       Without prejudice to any other mode of service allowed under any relevant law, the Guarantor:
 
(a)                                           irrevocably appoints WFW Legal Services Limited currently of 15 Appold Street, London EC2A 2HB as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
 
(b)                                           agrees that failure by a process agent to notify the Guarantor of the process will not invalidate the proceedings concerned.
 
18.2.2                       If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the Guarantor must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Security Agent. Failing this, the Security Agent may appoint another agent for this purpose.
 
This Guarantee has been executed on the date stated at the beginning of this Guarantee.
 
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Schedule 1                                     
Form of Compliance Certificate
 
To:                              [ Security Agent ]
 
From:                [ Guarantor ]
 
Dated:
 
Dear Sirs
 
Guarantee dated [                   ] 2015 between the Guarantor and the Security Agent in respect of a Loan Agreement dated [    ] between various parties
 
1                                          We refer to the Guarantee.  This is a Compliance Certificate.  Terms defined in the Guarantee have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
 
2                                          We confirm that:  [Insert details of covenants to be certified]
 
3                                          [We confirm that no Default is continuing.]*
 
·

·	·	 	·	 	 	
 	 	 	 	 	 	
Signed:	 	 	 	 	
 	 	 	 	 	 	
·	·	Director	·	Director	 	
 	 	 	 	 	 	
·	·	of	·	of	 	
 	 	 	 	 	 	
·	·	[ Guarantor ]	·	[ Guarantor ]	 	
 
·
 
·                                           [ insert applicable certification language ]**
 
·
 
·
 
·

* If this statement cannot be made, the certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it.
 
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Execution	 	
 	 	
The Guarantor	 	
 	 	
Signed and delivered	)	
as a Deed	)	
by Genco Shipping & Trading Limited	)	
acting by Apostolos Zafolias	)	/s/ Apostolos Zafolias	 	
 	)	
its duly authorised	)	
 	)	
in the presence of:	)	
 	 	
Witness signature:	/s/ Peter Allen	 	
Name: Peter Allen	 	
Address:	299 Park Avenue, 12th Floor
New York, New York 10171	 	

The Security Agent	 	
 	 	
Signed and delivered	)	
as a Deed	)	
by ABN AMRO Capital USA LLC	)	
acting by Sarah Yeowart	)	/s/ Sarah Yeowart	 	
 	)	
its duly authorised	)	
    Attorney-in-fact	)	
in the presence of:	)	
 	 	
Witness signature:	/s/ Lucas Griffith Wilkin	 	
Name: Lucas Griffith Wilkin	 	
Address:	Stephenson Harwood LLP
1 Finsbury Circus
London
EC2M 7SH	 	

17 

Exhibit 10.4
 
To:                              GENCO SHIPPING & TRADING LIMITED , a borrower organised and existing under the laws of the Republic of the Marshall Islands (the “ Borrower ”) for itself and as agent for each of the other Obligors party to the Facility Agreement (as defined below)
 
For the attention of: Apostolos Zafolias
 
28 April 2015
 
Dear Sirs
 
Facility agreement dated 12 August 2010 made between (i) the Borrower, (ii) the banks and financial institutions listed in Schedule I thereto as Lenders (iii) the Guarantors listed in Schedule 2 thereto and (iv) Crédit Agricole Corporate and Investment Bank in its capacity both as Agent and Security Trustee (as amended and restated on 9 July 2014 and amended and/or restated from time to time) (the “Facility Agreement”).
 
1.                                       BACKGROUND
 
(a)                                  We refer to the letter dated 18 March 2015 from the Borrower to the Agent regarding a request for the waiver and amendment of various terms of the Facility Agreement (the “ Request Letter ”). We understand that:
 
(i)                                      the Borrower has requested a waiver and amendments of certain of its obligations under clause 12 ( Undertakings ) of the Facility Agreement; and
 
(ii)                                   the Borrower and / or certain of its Subsidiaries are to be provided with a $150,000,000 revolving credit facility by ABN AMRO Capital USA LLC as original lender (the “ RCF ”).
 
(b)                                  In accordance with the instructions of the Majority Lenders, the purpose of this waiver and amendment letter (the “ letter ”) is to give effect to the waiver and amendments contained herein.
 
OPERATIVE PROVISIONS:
 
2.                                       INTERPRETATION
 
(a)                                  Capitalised terms defined in the Facility Agreement have the same meaning when used in this letter unless expressly defined in this letter.
 
(b)                                  The term “ Effective Date ” means the date on which each of the following conditions have been satisfied:
 
(i)                                      we confirm to the Borrower that we have received an acknowledgement and agreement to the terms of this letter signed by each Obligor; and

 
(ii)                                   a waiver and/or amendment agreement waiving and/or amending those terms of the DB Credit Facility similar to the waiver and/or amendment on the terms set forth in paragraphs 5(b) (and the applicable defined terms in paragraphs 5(c) relating thereto), 5(f) and 5(g) of this letter shall have become effective.
 
(c)                                   The provisions of clause 1.2 ( Construction of certain terms ) of the Facility Agreement apply to this letter as though they were set out in full in this letter with all necessary consequential changes and with references in that clause to the Facility Agreement being construed as references to this letter.
 
3.                                       CAPACITY
 
The waiver and amendments contained in this letter are granted by us in our capacity as Agent under the Facility Agreement, acting (where required) on the instructions of the Majority Lenders pursuant to clause 26 ( Variations and Waivers ) of the Facility Agreement.
 
4.                                       WAIVER
 
With effect from the Effective Date, the requirement to test the Consolidated Interest Coverage Ratio pursuant to clause 12.2(e) shall be waived during the period commencing on the Effective Date and expiring on 31 December 2016 (inclusive).
 
5.                                       AMENDMENT
 
With effect from the Effective Date the Facility Agreement shall be amended as follows:
 
(a)                                  The definition of “ Appraised Value ” in clause 1.1 ( Definitions ) of the Facility Agreement shall be deleted and replaced with the following:
 
“ Appraised Value ” of any Vessel or as applicable, any other Fleet Vessel, at any time shall mean the value of such vessel as determined in accordance with clause 16.3 or clause 16.9 as the case may be;
 
(b)                                  The definition of “ Leverage Ratio ” in clause 1.1 ( Definitions ) of the Facility Agreement shall be deleted and replaced with the following:
 
““ Leverage Ratio ” means, at any date of determination, the ratio of Consolidated Indebtedness (less any undrawn working capital lines) on such date of determination to Value Adjusted Total Assets ”;
 
(c)                                   Clause 1.1 ( Definitions ) shall be amended by inserting the following new definition in alphabetical order:
 
““ Approved RCF ” means the $150,000,000 secured revolving credit facility to be provided to the Borrower and / or certain of its Subsidiaries with ABN AMRO Capital USA LLC as arranger, agent, security trustee and original lender.

 
“ Fleet Market Value ” means the aggregate Appraised Value of the Fleet Vessels.
 
“ Fleet Vessels ” means any vessel from time to time owned by the Borrower and its Subsidiaries as they appear in the then most recent financial statements delivered pursuant to clause 12.1(a) and “Fleet Vessel” means any one of them.
 
“ Total Assets ” means the consolidated amount which is equal to the total assets of the Borrower and its Subsidiaries as shown in the applicable financial statements.
 
“ Value Adjusted Total Assets ” means the Total Assets adjusted in each case for the difference of the book value of the Fleet Vessels (as evidenced in the most recent financial statements delivered pursuant to clause 12.1(a)) and the Fleet Market Value.
 
“ Waiver Period ” means the period during which the requirement to test the Consolidated Interest Cover Ratio is waived pursuant to an amendment and waiver letter dated on or around 2015 between, amongst others, the Agent and the Borrower and as such waiver period may be extended in writing by the Agent.”
 
(d)                                  The definition of “Subsidiary” in clause 1.1 ( Definitions ) of the Facility Agreement shall be amended by adding the following to the end thereof: “so long as the Borrower does not own more than 50% of the economic interests in Baltic”.
 
(e)                                   Clause 12.2(h)(iii) ( Indebtedness ) of the Facility Agreement shall be amended by inserting the words “ , the Approved RCF (and for the avoidance of doubt, any utilisation of the Approved RCF would not constitute a new incurrence of Indebtedness provided that such utilisation would not result in an immediate Event of Default) ” immediately after the words “ DB Credit Facility ”.
 
(f)                                    Clause 12.2(m) ( Fleet Minimum Liquidity ) shall be amended by inserting the words “ For the purposes of the calculation of Fleet Minimum Liquidity under this Clause 12.2(m), amounts of readily available but undrawn committed working capital lines with a remaining availability period of more than 6 months including amounts unutilised by the Borrower and / or its Subsidiaries under the Approved RCF may be taken into account up to a maximum of 50% of the required free cash amount. ”
 
(g)                                   Clause 12.2(d) ( Maximum Leverage Ratio ) shall be amended by the deletion of the words “5.50:1.00” which shall be replaced with the words “ 70% ”.
 
(h)                                  Clause 12.2(g) ( Dividends ) sub-clause (ii) and sub-clause (iii) shall be amended by inserting the words “only after the expiry of the Wavier Period, ” immediately before the words “ so long as no Potential Event of Default or Event of Default has occurred and is continuing” in each of those sub-clauses .

 
(i)                                      Clause 16 ( Security Cover ) shall be amended by the insertion of the following new clause 16.9;
 
“Appraisal of Fleet Vessels: The Appraised Value of a Fleet Vessel other than a Mortgaged Vessel shall be determined pursuant to any required methodology and brokers approved in accordance with any contractual obligation addressing the manner in which such Fleet Vessel is to be appraised or valued (or if there is no such other required methodology, in a manner mutually acceptable to the Borrower and the Agent), provided that: (i) such Appraised Value shall be at the relevant date, the value shown by a valuation carried out by a third party appraiser not more than 6 months previously; (ii) the appraisal is carried out with or without physical inspection of the relevant Fleet Vessel (as the Agent may require); and (ii) such appraisal methodology is on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free from any existing charter or other contract.”
 
6.                                       RESERVATION OF RIGHTS
 
Save as expressly set out in this letter, this letter does not (and shall not be deemed to) constitute a waiver in respect of the provisions of any Finance Document or any breach thereof. Each Finance Party reserves any right or remedy it has now or in the future in respect of any Default which (i) arises from any circumstances other than those described in paragraph 1(a) or which is continuing as at the expiry of the period referred to in paragraph 4
 
7.                                       CONFIRMATIONS
 
Without prejudice to the rights of any Creditor Party which have arisen on or before the Effective Date:
 
(a)                                  each Creditor Party and each Obligor confirms that the Facility Agreement, as amended by this letter, remains in full force and effect on and after the Effective Date; and
 
(b)                                  each Guarantor confirms that its guarantee and indemnity under clause 9 ( Guarantee and Indemnity ) of the Facility Agreement and its liabilities under the Security Documents to which it is a party shall have effect on and after the Effective Date in relation to the liabilities of each Obligor under the Facility Agreement as amended and restated under this letter.
 
8.                                       REPRESENTATIONS AND WARRANTIES
 
As at the Effective Date, each Obligor represents and warrants to each Creditor Party that:
 
(a)                                  the repeating representations contained in clause 11.1 and 11.2 ( Representations ) of the Facility Agreement are true and correct; and

 
(b)                                  the information supplied in the Request Letter is true, accurate and complete.
 
9.                                       DESIGNATION AND EFFECT
 
This letter is a Finance Document and any breach of this letter by an Obligor shall constitute an Event of Default.
 
10.                                AMENDMENT FEE
 
The Borrower shall pay an amendment fee in accordance with the fee letter between the Agent and the Borrower dated on or around the date hereof.
 
11.                                THIRD PARTY RIGHTS
 
This letter does not confer any rights on any person or party (other than the signatories to this letter) under the Contracts (Rights of Third Parties) Act 1999.
 
12.                                COUNTERPARTS
 
This letter may be executed in counterparts. This has the same effect as if the signatures on the counterparts were on a single copy of this letter.
 
13.                                GOVERNING LAW AND JURISDICTION
 
This letter and any dispute or claim arising out of or in connection with it or its subject matter, whether of a contractual or non-contractual nature, shall be governed by and construed in accordance with the law of England and Wales.  The courts of England and Wales shall have exclusive jurisdiction to settle any dispute arising out of or in connection with this letter.

 
SIGNATORIES

 	)	 	 	 	
SIGNED by	)	 	 	 	
for and on behalf of CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK as
Agent and Security Agent and for and on behalf of
the Majority Lenders as defined in the Facility
Agreement	)	/s/ Jerome Duval	 	/s/ Michael Choina	
	)	Jerome Duval	 	Michael Choina	
	)	Managing Director	 	Director	
	)
)	 	 	 	

 
[On counterpart]
 
30 April 2015
 
We agree with the terms of this letter.
 
BORROWER

SIGNED by Apostolos Zafolias	)	 	
for and on behalf of GENCO SHIPPING &	)	/s/ Apostolos Zafolias	
TRADING LIMITED	)	 	

GUARANTORS	 	
 	 	
SIGNED by Apostolos Zafolias	)	 	
for and on behalf of GENCO BAY LIMITED	)	/s/ Apostolos Zafolias	
 	)	 	

SIGNED by Apostolos Zafolias	)	 	
for and on behalf of GENCO OCEAN LIMITED	)	/s/ Apostolos Zafolias	
 	)	 	

SIGNED by Apostolos Zafolias	)	 	
for and on behalf of GENCO AVRA LIMITED	)	/s/ Apostolos Zafolias	
 	)	 	

SIGNED by Apostolos Zafolias	)	 	
for and on behalf of GENCO MARE LIMITED	)	/s/ Apostolos Zafolias	
 	)	 	

SIGNED by Apostolos Zafolias	)	 	
for and on behalf of GENCO SPIRIT LIMITED	)	/s/ Apostolos Zafolias	
 	)	 	
 	 	
SIGNED by Apostolos Zafolias	)	 	
for and on behalf of GENCO SUGAR LIMITED	)	/s/ Apostolos Zafolias	
 	)	 	

Exhibit 10.5
 
To:                      Genco Shipping & Trading Limited
 
Copy:       Genco Lorraine Limited
Genco Pyrenees Limited
Genco Loire Limited
Genco Bourgogne Limited
Genco Picardy Limited
Genco Aquitaine Limited
Genco Normandy Limited
Genco Auvergne Limited
Genco Provence Limited
Genco Ardennes Limited
Genco Brittany Limited
Genco Languedoc Limited
Genco Rhone Limited
 
30 April 2015
 
Dear Sirs
 
US$253,000,000 secured loan agreement dated 20 August 2010 (as supplemented by a first side letter dated 24 August 2010, as further supplemented by a letter dated 21 December 2011, as amended and restated by a second supplemental agreement dated 1 August 2012 and as amended and restated by a third supplemental agreement dated 9 July 2014, the “Loan Agreement”) made between (1) Genco Shipping & Trading Limited as borrower, (2) the Lenders (as defined therein), (3) Deutsche Bank AG Filiale Deutschlandgeschäft, BNP Paribas, Credit Agricole Corporate and Investment Bank, DVB Bank SE and Skandinaviska Enskilda Banken AB (publ) as mandated lead arrangers, (4) ourselves as agent for the Lenders, (5) BNP Paribas, Credit Agricole Corporate and Investment Bank, Deutsche Bank AG, DVB Bank SE and Skandinaviska Enskilda Banken AB (publ) as swap providers (the “Swap Providers”) and (vi) Deutsche Bank AG Filiale Deutschlandgeschäft as security agent for the Lenders and the Swap Providers and as bookrunner.
 
All terms and expressions used in this letter shall have the same meaning given to them in the Loan Agreement unless defined herein.
 
This letter is designated as a Finance Document.  This letter replaces our letter dated 28 April 2015 sent to you on 28 April 2015.
 
We refer to the Loan Agreement and to your letter to us dated 18 March 2015 requesting from the Lenders (i) a temporary waiver of the Consolidated Interest Coverage Ratio in clause 12.2.2 ( Consolidated Interest Coverage Ratio ) of the Loan Agreement commencing on 30 June 2015 through and including the fiscal quarter ending December 31, 2016 (the “ Waiver Period ”), (ii) a permanent waiver of the Leverage Ratio in clause 12.2.3 ( Maximum Leverage Ratio ) of the Loan Agreement for the remainder of the Facility Period, (iii) a consent to permit amounts of readily

 
available but committed undrawn working capital lines with a remaining availability period of more than 6 months (the “ Undrawn Working Capital Lines ”) to be taken into account up to a maximum of 50% of the required free cash amount in the calculation of the minimum free cash requirement under clause 12.2.1(b) of the Loan Agreement and (iv) a consent to the provisions of the relevant clauses of each Assignment such that the requirements for such specific assignments apply only to charters or other contracts for the operation, employment or use of the Vessel exceeding (including any extension options) twenty-four (24) months’ duration (the “ Assignment Consent ”), subject to certain conditions.
 
The waivers and consents referred to in (i) — (iv) (inclusive) above shall be referred to herein as the “ Specified Waiver ”.
 
We hereby:
 
(1) agree to waive your compliance with (i) the Consolidated Interest Coverage Ratio in clause 12.2.2 ( Consolidated Interest Coverage Ratio ) of the Loan Agreement during the Waiver Period and (ii) the Leverage Ratio in clause 12.2.3 ( Maximum Leverage Ratio ) of the Loan Agreement during the remainder of the Facility Period;
 
(2) consent to Undrawn Working Capital Lines to be taken into account up to a maximum of 50% of the required free cash amount in the calculation of the minimum free cash requirement set forth in clause 12.2.1(b) of the Loan Agreement; and
 
(3) consent to the Assignment Consent;
 
subject to the following conditions:
 
(a)          the waiver in (1) above and the consent in (2)  above shall only become effective upon a waiver and/or amendment agreement waiving and/or amending those terms of the Metrostar Loan Agreement similar to the waiver and the consents contained in (1) and (2) above becoming effective;
 
(b)          on the day of this letter, you provide us with a copy (with an original to follow) of a certificate from a duly authorised officer of each Security Party confirming that none of the documents delivered to the Agent pursuant to Part I of Schedule 2 ( Conditions Precedent to a Drawdown Notice ), sections 1 (Security Parties), 2 (Security and related documents) (except 2(b) and 2(c)), as well as (b) and (c) of section 3 (Other documents and evidence), and Part II of Schedule 2 ( Conditions Precedent to the making of a Drawing ) sections 4 (Security Parties) and (a), (c) and (g) of section 5 (Security and related documents) of the Loan Agreement have been amended or modified in any way since the date of their delivery to the Agent, or copies, certified by a duly authorised officer of the Security Party in question as true, complete and accurate and neither as amended nor revoked, of any which have been amended or modified;
 
(c)           on the day of this letter, you provide us with a copy, certified by a director or the secretary of each Security Party as true, complete and accurate and neither amended nor revoked, of a resolution of the directors of that Security Party (together, where appropriate, with signed waivers of notice of any directors’ meetings) approving, and authorising or ratifying the
 
2 

 
execution of, the duplicate of this letter and any document to be executed by that Security Party pursuant to this letter;
 
(d)          within two (2) Business Days of the date of this letter, you pay us (for the account of the Lenders having consented to the Waiver in proportion to their respective Commitments) a waiver fee of zero point twenty five per cent (0.25%) on the outstanding amount of the Loan ;
 
(e)           during the Waiver Period, you will not authorize, declare or pay any Dividends with respect to the Borrower, notwithstanding the provisions of clause 12.3.13 of the Loan Agreement;
 
(f)            during the Facility Period, you will not permit the Leverage Ratio, as of the last day of any fiscal quarter during such period commencing with the fiscal quarter ending on 30 June 2015, to be greater than 70% (where “Leverage Ratio” means, at any date of determination, the ratio of Consolidated Indebtedness (less any undrawn working capital lines) on such date of determination to Value Adjusted Total Assets, “Total Assets” means the consolidated amount which is equal to the total assets of the Borrower and its Subsidiaries as shown in the applicable financial statements, “Value Adjusted Total Assets” means the Total Assets adjusted in each case for the difference of the book value of the Fleet Vessels (as calculated in the most recent financial statements delivered pursuant to clause 12.1.3(a)) and the Fleet Market Value, “Fleet Market Value” means the aggregate Fleet Fair Market Value of the Fleet Vessels where “Fleet Fair Market Value” means the market value of a Fleet Vessel determined pursuant to any required methodology in accordance with any contractual obligations addressing the manner in which such Fleet Vessel is to be appraised or valued (or if there is, no such required methodology, in a manner mutually acceptable to the Borrower and the Agent).  All valuations of any Fleet Vessel shall be made on the basis of a charter-free sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing buyer and willing seller by an Approved Broker appointed by the Agent or such approved broker as defined in the relevant loan facilities to the Borrower or any Subsidiary or Subsidiaries of the Borrower, and “Fleet Vessels” means any vessel from time to time owned by the Borrower or its Subsidiaries as they appear in the then most recent financial statements delivered pursuant to clause 12.1.3(a) and “Fleet Vessel” means any one of them;
 
(g)           within 60 days of the date of this letter you shall procure that the owners (the “Additional Collateral Owners”) of the vessels “GENCO THUNDER”, “GENCO RAPTOR”, “GENCO MUSE” and “GENCO CHALLENGER” (the “Additional Collateral Vessels”) grant to the Security Agent guarantees of your obligations under the Loan Agreement in the same form as the Guarantees given by the Collateral Owners (save for the logical changes) and as security for such guarantees execute in favour of the Security Agent mortgages over the Additional Collateral Vessels and assignments of the earnings, insurances and requisition compensation of the Additional Collateral Vessels to be in the same form as the Mortgages and Assignments in respect of the Vessels (save for the logical changes) together with all of the documents and other evidence listed in Parts I and II of Schedule 2 ( Conditions Precedent and Subsequent ) of the Loan Agreement required by the Agent in relation to the Additional Collateral Vessels and Additional Collateral Owners (as logically amended);
 
(h)          within fourteen (14) Business Days of receipt of an invoice in respect of any legal fees due from you in connection with this letter, evidence that such invoice has been paid in full; and
 
3 

 
(i)              at least sixty million United States Dollar (US$60,000,000) have been committed and/or drawn down under and pursuant to the one hundred and fifty million United States Dollar (US$150,000,000) revolving credit facility agreement made between, amongst others, ABN Amro Capital USA LLC and certain subsidiaries of Genco Shipping & Trading Limited.
 
If any of the above conditions (a) to (i) (inclusive) is not complied with then the Specified Waiver shall cease to apply with immediate effect. Any breach of condition (e), (f), (g) or (i) shall constitute an Event of Default. No such Event of Default will occur if the failure to comply is capable of remedy and is remedied within ten (10) Business Days of the Agent giving notice to the Borrower or the Borrower becoming aware of the failure to comply.
 
For the avoidance of doubt, save as set out in this letter, all the Lenders’ rights powers and remedies under the Loan Agreement are reserved in full and remain in full force and effect both during and after the Waiver Period.
 
Each Security Party confirms that any Encumbrance created and/or any guarantee granted by the Security Parties in favour of any of the Finance Parties remains in full force and effect and is not in any way affected by this letter.
 
This letter may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this letter.
 
This letter and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
 
Please confirm your agreement to the terms of this letter by signing and returning a duplicate of this letter to us.
 
Yours faithfully,

For and on behalf of	 	 	
Deutsche Bank Luxembourg S.A.	 	 	
(as Agent acting on the instructions of the Majority Lenders)	 	 	
 	 	 	
/s/ Marlene Heinemann	 	/s/ Franz-Josef Ewerhardy	
 	 	 	
Marlene Heinemann	 	Franz-Josef Ewerhardy	
 
4 

 
Confirmed and agreed on 30 April 2015
for an on behalf of

/s/ Apostolos Zafolias	 	 	
Genco Shipping & Trading Limited	 	 	
(as Borrower)	 	 	

/s/ Apostolos Zafolias	 	 	
Genco Lorraine Limited	 	 	
Genco Pyrenees Limited	 	 	
Genco Loire Limited	 	 	
Genco Bourgogne Limited	 	 	
Genco Picardy Limited	 	 	
Genco Aquitaine Limited	 	 	
Genco Normandy Limited	 	 	
Genco Auvergne Limited	 	 	
Genco Provence Limited	 	 	
Genco Ardennes Limited	 	 	
Genco Brittany Limited	 	 	
Genco Languedoc Limited	 	 	
Genco Rhone Limited	 	 	
(as Collateral Owners and Guarantors)	 	 	
 
5 

Exhibit 31.1
 
CERTIFICATION
 
I, John C. Wobensmith, certify that:
 
1.               I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 of Genco Shipping & Trading Limited;
 
2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.               Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.               The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.               The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 	/s/ John C. Wobensmith	
 	Name: John C. Wobensmith	
Date:  May 8, 2015	Title: President	

Exhibit 31.2
 
CERTIFICATION
 
I, Apostolos Zafolias, certify that:
 
1.               I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 of Genco Shipping & Trading Limited;
 
2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.               Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.               The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.               The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 	/s/ Apostolos Zafolias	
 	Name: Apostolos Zafolias	
Date:  May 8, 2015	Title: Chief Financial Officer	

Exhibit 32.1
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with Genco Shipping & Trading Limited’s (the “Company”) quarterly report on Form 10-Q for the quarter ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned President of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 8, 2015	/s/ John C. Wobensmith	
 	Name: John C. Wobensmith	
 	Title: President	
 
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with Genco Shipping & Trading Limited’s (the “Company”) quarterly report on Form 10-Q for the quarter ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 8, 2015	/s/ Apostolos Zafolias	
 	Name: Apostolos Zafolias	
 	Title: Chief Financial Officer	
 
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.